January 16, 2009

Soybean prices are likely to keep rising on Chinese demand and South American weather concerns.

 

"Argentina is forecast to have hot and dry weather again in the first half of next week, which will further stress corn and soybeans, especially corn, which is going through the sensitive pollination stage," said an analyst report by Commonwealth Bank of Australia.

 

Soybean exports from the U.S., especially to the world's biggest importer, China, remain strong, as the other two big soybean exporters, Brazil and Argentina, battle dry weather conditions that could seriously dent output.

 

However, fundamentals for wheat are not looking so rosy, putting pressure on prices.

 

Countries such as Argentina and India are expected to increase their wheat exports, adding to already abundant global wheat supplies.

 

India's federal agriculture minister Sharad Pawar said the country will review its ban on wheat exports in March, in place since 2007, once the current wheat harvest concludes.

 

The country harvested a bumper wheat crop last year and expects to repeat the performance this year, which would boost wheat stocks in the country to levels where exports could be feasible.

 

Already, the country has earmarked 2 million metric tonnes of wheat exports through inter-government deals.

 

However, demand for wheat continues to be strong in some parts of Asia.

 

In wheat deals this week, Japan's Ministry of Agriculture bought a total 157,000 tonnes of wheat from the U.S., Canada and Australia Thursday.

 

Meanwhile, bidding for state-run Trading Corp. of Pakistan's tender for the import of 250,000 tonnes of U.S. soft wheat will conclude this Saturday.

 

The company floated another tender to import 150,000 tonnes of optional-origin wheat this week, with bidding to close Jan. 31.