April 2, 2008

 

Asia Grains Outlook on Wednesday: Corn may rise as battle for acres heats up

 

 

Corn prices are likely to keep rising through the end of this week, as a battle for acres between corn and soybeans in the U.S. heats up.

 

Both corn and soybean futures settled higher Tuesday on the Chicago Board of Trade, as investors with money in both these futures realize they need to boost prices secure acreage for their respective crops.

 

The biggest corn purchase in Asia took place last Friday, when South Korean buyers bought 330,000 metric tonnes U.S. corn at US$342/tonne, a trader in Seoul said.

 

Other buyers are waiting to see if CBOT prices fall in the near term before buying corn and soymeal, the trader said.

 

Traders said at least one of the major buying groups in South Korea, Major Feedmill Group, is stocked with corn to last until October and soymeal until September. It is safe to assume that other groups have similarly stocked inventories, since South Korean buying groups often import in tandem.

 

However, Major Feedmill Group may step into the market with a tender soon for purchasing corn and soymeal for further month shipments.

 

In other news, traders said they don't think rice prices are likely to ease this quarter.

 

They said that with India banning all non-basmati rice exports and Vietnam mulling a rice export tax, Thailand will have to do most of the rice exports at least in the near term.

 

Rice traders in Thailand are keenly watching a 500,000-tonne Philippines rice import tender, likely to conclude April 17, to gauge what price level is acceptable to major buyers.

 

However, major rice producers and consumers, including China and India, have not yet resorted to imports - though they aren't exporting either - as they hope domestic production and stocks can tide them over this year.