July 25, 2007

 

Asia Grain Outlook on Wednesday: Wheat prices may rise on European downpour

 

 

Prices of imported wheat booked by traders in Asia may rise in the remaining week, as Chicago Board of Trade futures are likely to strenghten further.

 

At the CBOT, wheat futures are rising, underpinned by weather woes in Europe, as heavy rains are threatening the output and quality of Europe's wheat crop.

 

For corn and soybean futures on CBOT, expectations of wet weather in the U.S. Midwest is a bearish factor, but gains in wheat futures will likely provide support to both these commodities.

 

In Asia, there have been two corn import tenders so far this week, both from South Korea.

 

Korea Corn Processing Association rejected all bids in a tender to buy 55,000 tonnes of corn, but Nonghyup Feed Inc., or NOFI, bought 55,000 tonnes of U.S. corn in a tender.

 

NOFI will pay a premium of 252 U.S. cents a bushel to the Chicago Board of Trade's December contract for the U.S.-origin corn. If it is shipped from the U.S. Gulf, it will arrive between Sept. 11-30. If it is shipped from the Pacific Northwest, it will arrive between Sept. 21-Oct. 14.

 

Meantime, Japan's Ministry of Agriculture won't hold a weekly wheat import tender this week, a ministry official said.

 

However, the ministry will hold a simultaneous buy-sell, or SBS, tender to buy feed wheat and feed barley later Wednesday.

 

Under the SBS system, the ministry floats periodic tenders that simultaneously identify the price at which the ministry can buy products from an importer and the price at which it can sell the product to an end user.

 

Bids that provide the highest markup - or the difference between the price that the ministry will pay and the price that the ministry will receive - get preference.