Asian grain prices are likely to remain subdued in range bound trade for the next few days after falling substantially late last week, according to trade participants.

 

Some short covering cannot be ruled out, and is likely to provide support at least in the near term, they said.

 

The market tumbled after the USDA plantings intentions report was released last week, but the projected expansion in acreage of corn and soy has already been factored in, a Tokyo-based executive at a commodities brokerage said.

 

Corn and soy prices may fall again but before that happens, a small recovery is expected, he said.

 

The nearby May soy futures contract on the Chicago Board of Trade settled up 8 1/2 cents, or 0.9%, Tuesday at US$9.44 1/2 a bushel. Traders said prices may rise above US$9.50/bushel again before another round of correction.

 

In the cash market, the Kaohsiung branch of Taiwan's Breakfast Soy Procurement Association Wednesday bought 60,000 metric tonnes soy for May 21-June 4 shipment from Bunge Ltd.

 

BSPA-K made the purchase in a tender on cost-and-freight basis at a price of 184 cents a bushel over the July soy futures contract on CBOT.

 

The soy is likely to be of Argentinian, Uruguayan or Paraguayan origin.

 

CBOT July soy futures ended Tuesday (Apr 6) up 8 1/4 cents, or 0.9%, at US$9.53 1/2.

 

In corn, nearby month CBOT corn prices are likely to remain range bound between US$3.20-US$4.20 throughout 2010, Rabobank said in its latest report.

 

May corn ended 3/4 cent higher Tuesday at US$3.46 1/2 per bushel.

 

The usual corn demand from Southeast Asian countries is there but it is unlikely to support prices in a big way, an exporter in Singapore said.

 

Buyers in South Korea have bought at least 432,000 tonnes of US corn through tenders in the past week for August and September delivery.

 

Major Feedmill Group bought four cargoes of US No. 2 corn for August-September shipment totalling 220,000 tonnes at prices between US$217.95/tonne and US$224.97/tonne from Mitsubishi, Cargill and Daewoo Logistics.

 

In another tender, Korea Feed Association bought 47,000 tonnes of US yellow corn at US$216.95/tonne, on a cost-and-freight basis, from Japanese trading company Itochu for arrival at Incheon by September 5.

 

Short covering has provided fresh support for wheat but it is unlikely to last for long.

CBOT May wheat futures ended up 10 cents, or 2.2%, Tuesday at US$4.63 1/2 per bushel.

 

Rabobank has forecast that prices for the nearby contract are likely to hover around US$4.80/bushel during the second quarter, but many traders expect them to be lower.

 

There remains a significant divergence between prices of US wheat exports relative to both EU and Black Sea-origin exports, which has adversely affected the competitiveness of US wheat, the bank said.