July 11, 2007

 

Asia Grain Outlook on Wednesday: Soybean prices may rise, track CBOT gain

 

 

Prices of imported soybeans in Asia are expected to gain in the remaining part of the week, tracking Chicago Board of Trade futures.

 

CBOT soybean futures, higher so far this week, are likely to remain on an upward trend on continued dryness in U.S. soybean growing areas.

 

U.S. farmers are likely to sharply reduce their area planted with soybean as they switch to corn, and any concerns about the soybean crop will likely drive prices higher.

 

Corn and wheat prices, on the other hand, may remain rangebound the next few days, as no fresh fundamental factors are emerging for either of them.

 

In other news, the results of one of the biggest Asian wheat import tenders this year was announced on Tuesday. A government official said India's State Trading Corporation bought 511,000 metric tonnes of wheat from three trading houses - Cargill, Topefer and Riaz - in a tender originally intended to buy 1 million tonnes.

 

The wheat was purchased at US$317/tonne-US$330/tonne and will be delivered at the western Indian port of Mundra in August and September.

 

Analysts said India paid too high a price for imported wheat.

 

Government officials had rejected all bids in a tender to buy 1 million tonnes of wheat in May, when prices were much lower, considering the prices too high and expecting them to come down.

 

The U.S. Embassy in New Delhi issued a statement Tuesday expressing disappointment at India's strict standards on the presence of weeds in imported wheat. The federal government didn't disclose the origin of the wheat it bought Tuesday.

 

"India's very low weed seed standard is nearly impossible for any global exporter to meet, raising questions about the reliability of India's import inspection process," the US Embassy statement said in a statement posted on its Web site.

 

"The high cost to Indian consumers of these overly stringent rules is very high", the statement said, adding, "The prices being offered to India in the most recent import tender are significantly greater than recent purchase prices by other wheat importing nations."

 

In response to the U.S. criticism, Hindustan Times daily quoted Agriculture Minister Sharad Pawar as saying, "It is a question of paying more money or inviting weeds, which will affect Indian agriculture."