June 2, 2008

 

Asia Grain Outlook on Monday: Soybean likely to remain high on Argentina

 

 

Soybean prices are likely to remain high this week as farmers and the government in Argentina remain locked in a tussle over an export tax, which is hampering exports from the world's third largest soybean producer.

 

Besides, there have been some concerns over a delay in U.S. soybean planting.

 

U.S. traders Friday said there are market rumors about China continuing to book fresh soybean import shipments from the U.S. and Brazil, which is bullish for the market.

 

Commodities analysis firm Shanghai JCI reported Chinese traders bought 3-4 soybean cargoes from the U.S. and Brazil last week.

 

The Brazilian shipments are to be delivered in June and July and those from the U.S. in October, said an analyst at the firm.

 

However, traders in China, the world's biggest soybean importer, are wary of buying too much soybean as Chicago Board of Trade soybean futures remain high and the new rapeseed crop enters the market.

 

In other commodities, a report by the U.S. Wheat Associates late Thursday said importers are delaying their purchases of U.S. white wheat on expectations of a further fall in prices due to record U.S. and Australian wheat crops later this year.

 

The report said white wheat prices have fallen 33% over the last four months, though the current price of US$400 a metric tonne is still 125% higher than the average white wheat price in 2007.

 

In Australia, the world's second biggest wheat exporter after the U.S., farmer confidence is running low ahead of the wheat planting season, said a survey Monday by Rabobank Australia.

 

Farmers are concerned without significant winter rain grain producers might not be able to leverage firm commodity prices.

 

Dry weather continues to persist in parts of Australia, which is bad news for its agriculture sector. Two successive years of drought in 2006 and 2007 ravaged the production of major crops in Australia, including wheat.