July 18, 2007

 

Asia Grain Outlook on Wednesday: Prices may fall this week on CBOT trend

 

 

Prices of imported grains in Asia are likely to fall in the remaining part of this week, tracking the weak trend in Chicago Board of Trade Futures.

 

Over the past two sessions, CBOT corn and soybean futures have fallen as rains in the U.S. Midwest have improved prospects for both crops.

 

For wheat, prices are likely to keep falling in the near-term as U.S. wheat output in 2007 is likely to be substantially higher than last year.

 

The U.S. Department of Agriculture estimates 2007 wheat production will be 2.138 billion bushels, up from 1.812 billion in 2006.

 

In Asia, China's soybean imports will likely remain slow over the next few weeks, on low demand for soymeal and high stocks of around 4 million tonnes soybean in Chinese ports.

 

Commodities analysis firm JCI Shanghai said that some Chinese traders may have canceled two-three cargoes of imported soybean over the past week, adding that some more traders may take similar action over the next several days as international soybean prices remain high and domestic prices stay low.

 

In Taiwan, flour millers are keenly eyeing the Taiwanese government's inspection of a 9,000-tonne U.S. wheat cargo in Taichung harbor.

 

Last Saturday, a similar inspection led to the rejection of a 9,000-tonne U.S. wheat shipment because of the discovery of traces of malathion pesticide residue.

 

Flour millers say that if more wheat shipments are rejected, it would become difficult to convince sellers to bid for Taiwanese wheat import tenders.

 

They added that the country currently has wheat stocks for about 1.5 months, and hence further rejections of U.S. wheat shipments could lead to shortages.

 

According to officials in Taiwan's Bureau of Food Safety, the inspection of the U.S. wheat cargo may be completed later Wednesday.

 

In expected deals this week, Japan's Ministry of Agriculture, Forestry and Fisheries has sought a lower-than-usual 70,000 tonnes of wheat in its weekly tender to be concluded Thursday. The ministry gave no explanation for the lower volume or why it sought only U.S. wheat this week, ignoring Canadian and Australian wheat.