May 11, 2009

 

Asia Grain Outlook on Monday: Corn, soybean may rise on USDA report

 

 

Corn and soybean prices are likely to be higher over the next few days, as analysts expect a bullish crop report by the U.S. Department of Agriculture Tuesday.

 

U.S.-based analyst Tim Hannagan said the monthly crop report is likely to predict a reduction in U.S. stocks for both corn and soybeans, which would be supportive for both commodities.

 

He said a strong demand for corn and soybeans in April and an output fall in both crops in South America due to drought were contributing factors for the likely drop in stocks.

 

At 0708 GMT, Chicago Board of Trade July corn contract was lower by 3 cents at US$4.18 a bushel, while the July soybean contract was down 18.4 cents at US$10.93/bushel.

 

Hannagan added last week's U.S. soybean exports were 22% lower on week due to a weaker offtake by China, the biggest buyer.

 

Last week, China bought only 197,000 metric tonnes of soybean compared with 486,000 tonnes the previous week.

 

Meantime, there are expectations India's federal government may allow private traders to export up to 2 million tonnes of wheat next week, as the country has sufficient stocks for domestic needs.

 

India's private traders haven't exported wheat since 2007.

 

However, India's private traders said the country's wheat exports can't be viable without offering a state subsidy to exporters, as local prices are US$50/tonne higher than international prices.

 

On the other hand, Pakistan's chief wheat growing province, Punjab, is also seeking to export 1 million tonnes of wheat and has set up a committee of local politicians and bureaucrats to finalize the export policy, according to the Daily Times newspaper.

 

Local officials said the government will have surplus wheat stocks after meeting the needs of the region's population, which annually consumes around 3.5 million tonnes of wheat, the newspaper added.