April 9, 2007

 

Asia Grain Outlook on Monday: Gains seen in wheat, corn; soybeans weak

  

 

Prices of imported wheat in Asia may rise in the week ahead, as Chicago Board of Trade wheat futures may continue to build on freezing weather in several wheat growing U.S. states.

 

Corn prices may also rise because of the surge in wheat futures, as any shortfall in wheat output will likely increase corn demand for feed purposes.

 

However, downside pressure remains on soybean prices as the South American soybean harvest is putting pressure on international prices.

 

In Asia, Chinese soybean bookings over the past week picked up some pace, though soybean buyers continue to remain cautious.

 

Soymeal demand in China continues to be slow, as poultry and livestock sector demand isn't growing fast.

 

However, falling international soybean prices encouraged Chinese traders to make active inquiries in international market.

 

According to commodity analysts JCI Shanghai, China booked four to six cargoes of soybean last week, all of them of Argentine origin at a premium of 134-140 U.S. cents/bushel to the CBOT July contract, for shipment in May and June.

 

JCI noted that Argentine soybean premiums are quite a bit lower than both Brazil and U.S. soybeans.

 

Brazilian soybean delivered to China is being offered at a premium of 151-160 cents/bushel to the CBOT July contract, while U.S. soybean is offered at 180-185 cents/bushel to CBOT July contract.

 

In wheat, Japan's Ministry of Agriculture resumed its weekly wheat tenders, purchasing 170,000 metric tonnes of food grade wheat jointly from the U.S., Canada and Australia.

 

In other news, Indian traders and flour millers remain confident that the country will import between 2 million and 3 million tonnes of wheat in 2007, despite expectations of a bumper wheat harvest.

 

Traders said the federal government's output estimate of 73.7 million tonnes of wheat in 2007, versus 69.5 million in 2006, seemed inflated and a clearer picture will emerge by the end of the month, when the harvest draws near to conclusion.

 

India imported 6.5 million tonnes of wheat in 2006.

 

Elsewhere in Asia, buying of corn and wheat remained quiet as most buyers in South Korea, Taiwan and Japan remain well-stocked in both these commodities for the next two to three months. Traders are also waiting for CBOT futures to slip a bit, before making larger import commitments for grains.