March 5, 2008

 

Asia Grains Outlook on Wednesday: Wheat may fall on commodity jitters

 

 

Wheat prices may fall in the remainder of this week as the commodity complex appears to have a case of the jitters.

 

Commodities from grains to gold are showing signs of weakness after recent record highs.

 

On the demand side, Asian wheat buying has been strong so far this week.

 

On Tuesday, Japan's Ministry of Agriculture sought 117,000 metric tonnes of wheat in a tender to be concluded Thursday.

 

The Taiwan Flour Millers Association bought 75,000 tonnes of U.S. No.1 wheat this week from Columbia Grains, which included expensive spring wheat, in addition to less costly winter wheat.

 

A shortage of spring wheat in the U.S. triggered a wheat price rally that saw the grain touch record highs by late January, though prices have come down somewhat so far this month.

 

A large Indian trading firm has entered into a contract to export 40,000 tonnes of corn to Malaysia at US$273 a tonne, cost and freight. The shipment will reach Malaysia in April. The names of the buying and selling companies couldn't be ascertained.

 

Meanwhile, Asian feed producers are feeling the pinch of high corn and soybean prices. Thailand's feed producers have asked the country's Commerce Ministry to approve a 10% increase in feedmeal prices, as raw material costs of corn, soymeal and other ingredients have risen by up to 50% since 2006.

 

In Thailand, producers must gain government approval for feedmeal price hikes.