January 23, 2009

Wheat prices are likely take a cue from the price state-owned Trading Corporation of Pakistan pays for its tender to buy 250,000 metric tonnes of U.S. wheat over the weekend.

Demand for wheat remained buoyant last week, with Japan buying a total of 157,000 tonnes of U.S., Australian and Canadian wheat while Egypt bought 178,000 tonnes of Russian, French and U.S. wheat.

Pakistan is expected to buy another 150,000 tonnes of mixed-origin wheat on Jan. 31.

Tim Hannagan, analyst with U.S.-based Alaron Securities, said that the major export destinations for wheat currently are Russia and other European countries and the U.S., the world's biggest exporter, is "no better than a third port of origin."

Wheat prices are therefore evenly poised - with robust demand and supply of wheat.

The equilibrium could be disturbed if India, which will soon harvest what is expected to be its second successive bumper crop, allows wheat exports in the next two-three months.

India became a net wheat importer in 2006 after several years of steady wheat exports.

In deals this week, South Korea's Nonghyup Feed Inc. bought a total 110,000 metric tonnes of U.S. and South American feed corn for May and June delivery.

Meantime, after a slow start for soybean imports so far this year, Taiwan's Breakfast Soybean Procurement Association bought 99,000 tonnes of U.S. and Brazilian soybeans this week.