February 25, 2009

Wheat prices are likely to remain pressured on weak demand amid ample global supply.

 

"For now, we continue to see weak demand (for wheat) and assume a follower's role to corn and soybean (prices)," said Tim Hannagan, analyst with U.S.-based commodities brokerage Alaron.

 

He added that technical support for the Chicago Board of Trade May wheat contract is pegged at US$5 a bushel, with the next support level at US$4.85/bushel.

 

At 0608 GMT, CBOT wheat was trading at US$5.28/bushel, 1.6 cents higher than Tuesday's overnight close.

 

In other wheat news, Japan's Ministry of Agriculture will slash the price at which it sells imported wheat to flour millers by 14.8% on April 1, to Y64,570/tonne, the Manichi Daily News said in its online edition Wednesday.

 

It added that subsequent to the government announcement, Japan's largest flour miller, Nisshin Seifun Group Inc, declared it will reduce its flour prices, with the newspaper adding that other flour millers may follow suit.

 

The Japanese government is the country's monopoly wheat importer.

 

In other news, unlike last year, when Malaysia was importing around 100,000 tonnes of corn each month from India, purchases so far this year aren't more than 30,000 tonnes a month.

 

Buyers in Malaysia say it is cheaper to import between 60,000 and 70,000 tonnes of corn from South America in large panamax vessels, while smaller volumes in containers are more viable to be secured from India. Small volumes have also been purchased from Myanmar and Thailand.

 

"Each month, two or three panamax vessels of corn are being delivered at west Malaysia ports from South America," said a Malaysia-based importer.

 

He said that this year, close to 70% of Malaysia's corn supplies are likely to be from South America.

 

Malaysia imports between 150,000 and 200,000 tonnes of corn each month, mostly for its poultry feed industry.