May 5, 2008

 

Asia Grain Outlook on Monday: Corn may remain higher on weather, acreage

 

 

Corn prices are likely to remain higher in the week ahead on concerns about lower sowing of corn and the weather for planting in the U.S.

 

Analysts in the U.S. said corn prices could remain at unprecedented highs for the next several months if further weather disruptions and loss of corn acreage to soybean continues in the U.S.

 

Among other crops, soybean prices may also remain firm in the near-term, as Argentine farmers threatened to resume a full-scale strike this week if talks with the government Tuesday on an export tax don't yield results, possibly shutting down soybean exports from the world's third largest producer again.

 

A strike by Argentine farmers would likely translate into more demand for U.S. soybeans.

 

Meanwhile in the rice market, the Philippines canceled its tender to import 675,000 metric tonnes, as it received only one bid from Vietnam.

 

Philippine government officials said the country will not seek rice in government tenders again this quarter, but it will seek rice through such tenders in the third or fourth quarter of the year.

 

However, private companies will bid May 9 for a rice import quota of 163,000 tonnes. The government has set a minimum service fee of PHP2 per kilogram to receive a portion of the import quota, and bidders offering the highest service fees will be given priority in the assignment of the quotas.

 

In other news, the China Daily reported Monday that China has stepped up efforts to curb illegal rice and wheat exports as traders try to smuggle out grains to take advantage of record high global prices.

 

The daily said that attempts to smuggle out rice and wheat illegally have been curbed by customs officials in Hangzhou city and Ningbo city.

 

In India, the government seems to be inching closer to banning futures trading in more agriculture commodities as several political parties blame futures trading for higher prices.

 

"If rightly or wrongly, people perceive that commodities futures trading is contributing to a speculation-driven rise in prices, then in a democracy, you will have to heed that voice," Bloomberg News quoted Finance Minister Palaniappan Chidambaram as saying in Madrid over the weekend.

 

India banned futures trade in rice, wheat and lentils to curb rising prices in 2006. Inflation is quite high in India at present, driven by high prices of food and industrial raw materials such as cement and steel.