May 14, 2007
Asia Grain Outlook on Monday: Prices may rise on CBOT, freight cost
Prices of imported grains in Asia may rise in the week ahead, as the U.S. Department of Agriculture's forecast Friday of tight U.S. grain stocks this year will likely continue to support Chicago Board of Trade grain futures.
Additionally, continued gains in ocean freight costs continue to drive prices of imported grains higher.
Coupled with high international soybean prices, Chinese soybean crushers may continue to buy fewer soybean cargoes over the next few weeks, analysts said.
Over the past week, Chinese traders booked three to four cargoes of optional-origin soybeans from the U.S. or Argentina, compared to usual volumes of 8-10 cargoes.
For June-July shipment, the premium for soybeans delivered to China from the U.S. Gulf or Argentina is at 165-190 U.S. cents/bushel to the CBOT July soybean contract.
In other news, India continues to expect wheat output in 2007 to exceed 2006's harvest, Agriculture Secretary P.K. Mishra said Friday.
"We haven't made any change so far in our earlier estimate of 73.7 million tonnes of wheat output this year. It's unlikely to be lower than this level and may be around 74 million tonnes," Mishra told reporters.
India produced 69.35 million tonnes of wheat in 2006, according to government estimates.
Grain imports in major importing nations such as Japan, South Korea and Taiwan continue to remain sluggish as high ocean freight costs discourage buying.
There were only two major corn and wheat tenders in Asia last week.
Japan's Ministry of Agriculture, Forestry and Fisheries Thursday bought 140,000 tonnes of wheat in a tender for arrival between June 21 and July 20.
The Korea Corn Processing Industry Association, or Kocopia, Wednesday bought 55,000 tonnes of optional-origin corn for delivery at Inchon port on Aug. 20.
If the corn is of U.S. or South American origin, it will be supplied at US$238.05/tonne, while Chinese corn will be supplied at US$230.05/tonne.
