July 4, 2007

 

Asia Grain Outlook on Wednesday: Corn may fall tracking CBOT's weak trend

 

 

The price of corn imported to Asia may continue to fall in the week ahead, as Chicago Board of Trade corn futures will likely to continue their weak trend.

 

The U.S. is headed toward a record corn harvest, beginning in late September, with no immediate weather concerns for the developing crop.

 

Adding to the bearish sentiment, analysts at a grains conference in Beijing said they expect China's corn exports will rise 32% on year to 5 million metric tonnes for the marketing year ending Sept. 30.

 

The rise comes on the top of an expected bigger Chinese harvest in 2007 than in 2006.

 

However, Asian grains buyers are lukewarm about a likely rise in Chinese corn exports, saying that additional corn from China will find willing buyers in Asia only if it proves to competitive with U.S. corn.

 

A Japanese grains trader said that the price of U.S. corn is falling by the day and Chinese corn will only find more demand if its is priced lower than U.S. corn.

 

A South Korean trader said traders typically buy Chinese corn when its around US$8-10/tonne lower than U.S. corn prices.

 

In India, state-run State Trading Corp. received seven bids between US$320-US$370/tonne for its wheat tender to import 1 million tonnes, which concluded Wednesday.

 

Traders said a decision to purchase the wheat may come by July 10.

 

The government isn't likely to buy much wheat in this tender after it rejected all bids in a similar tender in May, as it considered bids in the US$265-310/tonne range for that tender too high.

 

The bids are higher this time, as international wheat prices have increased over the past month due to historically low international wheat stocks and weather concerns for U.S. and European wheat crops.