Asia Grain Outlook on Monday: Prices may fall on lack of fresh factors

 

 

Grain prices may fall in the next few days in the absence of fresh fundamental factors.

 

On Friday, Chicago Board of Trade corn, soybean and wheat futures contracts fell as U.S. weather conditions for corn and soybean improved. The fall in wheat futures was prompted by the losses in corn and soybean contracts.

 

Prices continued to decline Monday in the Asian trading hours. At 0543 GMT, CBOT July soybean contract was down 12 cents from Friday's pit-trade closing at US$15.20 per bushel. The July corn contract was down 7.4 cents at US$7.13/bushel, and the July wheat contract was down 11.4 cents at US$8.55/bushel.

 

Analysts said inflation concerns in India and China may affect the commodity boom as a whole if spending power is eroded, so it could be negative in the longer term for grains futures.

 

Markets are keenly awaiting a U.S. Department of Agriculture report due June 30, which will provide up-to-date planting data for U.S. grains.

 

In other news, while India's federal government has yet to release planting figures for the summer-sown crop, the critical June-September monsoon rains are off to a great start, which augurs well for the harvest.

 

India's monsoon rains have been 45% above normal in the first two weeks of this month, and have covered almost the entire country.

 

With good rains in key agricultural provinces, hopes for bumper harvests of rice, oilseeds, coarse grains, pulses and sugarcane are bright.

 

In deals last week, Japan's Ministry of Agriculture concluded one of its biggest weekly wheat purchases of the year, buying a total 227,000 metric tonnes wheat from the U.S., Australia and Canada.

 

Meanwhile, Chinese importers last week bought four-five cargoes of soybeans from the U.S. and Brazil for October and November delivery, according to commodities analysis firm Shanghai JCI.

 

However, Chinese traders canceled 463,500 metric tonnes of old soybean contracts that were to have been delivered before August due to high U.S. soybean prices and expectations that the Argentine farmers' strike may end any time, analysts said.