June 18, 2007

 

Asia Grain Outlook on Monday: Corn may rise on dry US weather

 

 

The price of imported corn delivered to Asia is likely to rise in the week ahead, as dry weather in the U.S. is likely to keep Chicago Board of Trade corn futures well-supported.

 

Continued dry weather in the U.S. is likely to have an adverse impact on the planting of corn, currently underway in the U.S.

 

Meantime in Asia, Chinese crushers are unlikely to increase soybean imports this week, despite a fall in soybean premiums delivered to China, said the commodities analysis firm JCI Shanghai.

 

Last week, Chinese traders bought only small amounts of South American soybeans for shipment in July and August.

 

The current premium for Argentine soybeans shipped to China is 138-149 U.S. cents/bushel to the CBOT July contract compared with 146-160 cents/bushel last week.

 

The premium for Brazilian soybeans shipped to China is at 157-168 U.S. cents/bushel to CBOT July contract compared with 165-174 cents/bushel in the previous week.

 

In wheat, India may issue a tender to import up to 2 million metric tonnes of wheat by the end of the month, a senior government official said last week.

 

India earlier this month canceled all bids in a 1-million-tonne purchase tender, as prices were too high.

 

"The plan is to issue a tender by the end of this month through State Trading Corp.," the official said.

 

Finally, in potentially bearish news for Chinese corn prices, the U.S. Department of Agriculture said that while corn will remain important for existing ethanol plants in China, the government will likely not grant more licenses to corn-based plants, as the government seeks non-food based sources for ethanol.

 

Instead, there will be an increased shift toward ethanol production from cassava and sweet potatoes.