March 22, 2010

 

Asia Grain Outlook on Monday: Trade lackluster ahead of planting report

 

 

Grain markets in Asia are likely to be lackluster ahead of the release of the U.S. Department of Agriculture's plantings report at the end of the month, traders and analysts said Monday.

 

"There isn't much going on at the moment. Given the large crops in South America this season, ample supplies have been and will continue to weigh on market sentiment," said an analyst at an international commodities trading house in Beijing.

 

Soys and corn should trade rangebound before the plantings report next week, he said, pegging US$9-US$10.50 a bushel for soys and US$3.50-US$4.00/bushel for corn.

 

The benchmark May soy futures contract was traded at US$9.59 1/2 a bushel at 0745 GMT, down 0.2%. The May corn contract was flat at US$3.74 1/2 per bushel.

 

"So far, the weather in the U.S. doesn't seem to be a real problem; just think about the good harvest in South America," said a trader.

 

As soil in the U.S. Midwest is unusually moist due to rainfall and melting snow, some analysts are worried that it could affect planting decisions, which lent support to prices Friday.

 

"Weather concerns regarding the U.S. spring planting conditions have provided the recent bounce to prices, but hefty global supplies in 2009-10 provide a buffer to the markets save for any significant shortfalls," said Barclays Capital in a research note Friday.

 

China, the world's largest soy buyer, slowed its purchases in February to 2.95 million tonnes, compared with 4.08 million tonnes in January, the General Administration of Customs said Monday.

 

Loading delays in Brazil indicated that U.S. soys will continue dominating arrivals in March and the first half of April, said the China National Grain and Oils Information Center in a report last Thursday.

 

"Total imports are likely to fall below the earlier forecast," it said, without providing a specific estimate.

 

China's Ministry of Commerce pegged its forecast for March soy imports at 3.90 million tonnes at the beginning of this month.