Asia Grain Outlook on Wednesday: Grains rebound limited due to ample supply

 

 

A rebound in grains futures traded on the Chicago Board of Trade will probably be limited, given ample supplies around the world, analysts said Wednesday.

 

After declining more than 10% since the beginning of the year, corn is likely to test nearby resistance as investors cover short positions, said Koname Gokon, an analyst at Okato Shoji in Tokyo.

 

Soy and wheat are more likely to be moving sideways following declines of similar percentages, he said.

 

CBOT benchmark March corn futures were up 0.5% at US$3.67 a bushel at 0829 GMT. March soy were at US$9.30/bushel, up 0.5%. March wheat futures had risen 1% to US$4.92/bushel.

 

"Among the three, corn is relatively strong, while soy and wheat are weighed heavily by (supply-demand) fundamentals," Gokon said, pegging resistance for corn at US$3.70/bushel.

 

Given wetter-than-normal weather conditions last fall, some people are concerned about the quality of the corn that was put into storage then, Alan Brugler, president of Brugler Marketing & Management, said in a newsletter Tuesday.

 

Movement of corn is expected to increase when temperatures start to warm up on a consistent basis, and the concerns have emerged as the weather has warmed up, he said.

 

Despite the chance of a rebound in the short term, analysts said the big U.S. crop and coming crop in the South America are keeping the overall tonnee bearish tonnee for corn.

 

"The coming South American soy crop is an even bigger problem for soy," Gokon said.

 

Market participants said Chinese buyers have been turning away from U.S. beans for the new crop in Brazil and Argentina.

 

China is the world's top importer of soy. Its strong imports since November fueled the earlier rally on the CBOT.