May 21, 2007

 

Asis Grain Outlook on Monday: Prices may slide on weak CBOT trend  

 

 

Prices of imported wheat may ease in the week ahead, as Chicago Board of Trade grain futures may slide.

 

Both corn and soybean futures on CBOT may fall in the coming week as beneficial weather conditions for crop sowing in the U.S. are likely to persist.

 

For wheat, the approaching harvesting season in the U.S. is likely to keep prices depressed. A slump in wheat prices in the run-up to the harvest is a long-established tradition.

 

In Asia, grain buying remains sluggish due to record high ocean freight costs for Panamax-sized vessels.

 

London-based shipbroking firm Simpson, Spence and Young said online that the Panamax market has set a new historical high, passing the previous peak of late 2004, when average earnings for chartering a Panamax vessel were US$51,083 a day. It didn't, however, mention the current chartering price for Panamax vessels.

 

The world's largest soybean importer, China, is unlikely to step up soybean imports anytime soon, as international prices remain high.

 

Last week, Chinese traders booked two to four cargoes of Argentine soybeans and a small amount of U.S. soybeans, said commodities analysis firm JCI Shanghai.

 

China isn't buying much Brazilian soybeans because of higher prices than U.S. and Argentine varieties.

 

JCI Shanghai said that while Chinese buyers booked soybean shipments last week from Argentina and the U.S. at premiums of 178-186 U.S. cents/bushel to the CBOT July contract, they may have to shell out even more for subsequent imports in the coming weeks.

 

It said Argentine soybean premiums are heading to 200 cents/bushel above CBOT's July contract.

 

Meanwhile, in India, a tender issued by the state-run State Trading Corp. to import up to 1 million tonnes of wheat will be concluded later Monday.

 

Most of the bids likely to be received in the tender will be between US$255 and US$290/tonne, said an official at an international trading company.