July 2, 2012

Asia grain traders hold out for USDA report as prices climb

In anticipation of a major USDA report that is expected to provide greater clarity on prices, Asia grain traders are refraining from making grain deals.

Grain tenders have been rare in Asia over the past two weeks due to high prices, according to traders in Japan, South Korea and Thailand.

Extreme heat in the US Midwest is stressing corn at a key development stage, according to grain merchant Gleadell, underscoring the importance of weather to crops.

"Of all the grains, corn will remain the most driven by weather concerns," said Kaname Gokon, deputy general manager at Tokyo-based brokerage Okato Shoji, who added that the commodities complex will likely get a boost Friday (June 29) from progress by euro-zone leaders, who agreed to measures aimed at stabilizing volatile markets.

The USDA's report will include the results of a survey of farmers to estimate planted acreage of key crops, including corn and wheat, and a report on the size of inventories of agricultural commodities as of June 1.

Analysts polled by Dow Jones on average expect an estimate for all wheat plantings of 56.85 million acres, up from 54.41 million acres last year and higher than the agency's last forecast of 55.91 million acres. Analysts on average expect wheat inventories of 726 million bushels, down from 862 million bushels a year earlier.

On Thursday (June 28), CBOT July corn rose 2 1/2 cents, or 0.4%, to US$6.52 a bushel. December corn fell 3/4 cent, or 0.1%, to US$6.3225 a bushel.

Okato Shoji's Gokon tipped December corn on the Chicago Board to Trade to test US$6.70 a bushel next month if weather conditions do not improve.

China's soy imports in June will likely total 6.79 million tonnes, according to the Ministry of Commerce. The ministry revised its estimate upward from 6.56 million tonnes based on reports from importers during the June 1-15 period, according to a statement on its website dated Wednesday (June 27). The ministry said July soy imports will likely reach 4.6 million tonnes.