Asia Grain Outlook on Tuesday: Traders cautious ahead of US plantings report

 

 

A cautious tonnee continues to prevail among Asian grain traders as the U.S. Department of Agriculture is due to issue data on plantings on Wednesday.

 

Soy and corn futures traded on the Chicago Board of Trade rose slightly in Asian trading on Monday on short covering ahead of the data amid a weaker U.S. dollar against the euro.

 

The benchmark May soy contract up 0.7% at US$9.58 1/2 a bushel at 0731 GMT. May corn futures were up 0.4% at US$3.57 1/2 a bushel.

 

"I'm not betting on either side," said Genichiro Higaki, head of the proprietary fund management team at Sumitomo Corp. in Tokyo.

 

Survey-based estimates of how many acres of corn and soy U.S. farmers plan to plant this spring are expected to set the tonnee for agricultural products in the short term.

 

Market participants expect higher acreage of both soy and corn in the U.S., which has already led to bearish sentiment among CBOT traders.

 

As the U.S. is the world's largest exporter and producer of the two farm products, and has a relatively high stock level of both, any upside surprise in the acreage report will likely add pressure on the grain markets.

 

Even if the report comes out as the market expects, the mammoth supplies mean prices still have to "turn down a bit, although the downside could be limited," said Hiroyuki Kikukawa, head of research at IDO Securities in Tokyo.

 

Meanwhile, China, the world's largest soy importer, has been slow in ordering near-month cargoes from South America amid concerns of port delays in Brazil and a strike in Argentina, the China National Grain and Oils Information Center said in a report last week.

 

A port workers' strike in Argentina, the third-largest soy exporter, demanding wage hikes disrupted the country's main grain export hub last week.