Asia Grain Outlook on Wednesday: Soybean may keep rising on weather, China

 

 

Lack of rains in Argentina and Brazil are likely to hit soybean crops in these countries, which are the major competitors of the U.S. in global soybean export markets, despite forecasts for wetter weather in some of Argentina's growing areas in the next six-to-10 days.

 

Tim Hannagan of U.S.-based Alaron Securities said that China, the world's biggest soybean importer, will also likely resume imports once the Chinese New Year festivities draw to a close by the end of the month.

 

He said that from Feb. 1 there could be a surge in Chinese imports as pent-up demand for soybeans is released after the holiday period.

 

Unlike earlier years, when China would slow down or discontinue soybean purchases in early January and pick up in mid-February once the South American crop is in the market, this year fear of the drought in South America kept China buying U.S. soybeans aggressively throughout January.

 

In other grains, wheat trade will slow down a bit this week, as Japan and Pakistan have put off tenders.

 

Japan won't be holding a weekly wheat purchase tender this week, after heavy buying over the past three weeks.

 

Meanwhile, the state-run Pakistan Trading Corporation has postponed the last date for submitting bids in a 250,000-metric tonne U.S. wheat import tender to Jan. 31 from Jan. 24.

 

The tender deadline had earlier been extended to Jan. 24 from Jan. 10.

 

On Jan. 31, Pakistan will also close bidding on a separate 150,000-tonne optional-origin wheat purchase tender.

 

Pakistan is expected to harvest 25 million tonnes of wheat in 2009, up from 21.8 million tonnes last year, according to Ibrahim Mughal, chairman of the Agri-Forum farmers' association, the Dawn daily reported on its Web site Wednesday.

 

Pakistan had imported wheat throughout 2008 to meet a shortfall in supply against domestic demand and to ease rising flour prices. Higher output will likely cut Pakistan's overall wheat imports this year, and could act as a bearish influence on global wheat prices.