August 6, 2007

 

Asia Grain Outlook on Monday: Corn, soybeans may rise, tracking CBOT

 

 

Corn and soybean prices delivered to Asia are likely to rise in the week ahead, with Chicago Board of Trade futures expected to continue gaining.

 

CBOT corn and soybean futures are rising because of hot U.S. Midwest weather, which is affecting planting of these crops.

 

In Asia, rising ocean freight costs are a major source of concern for grains buyers.

 

Ocean freight costs have doubled since the beginning of the year, fueled by demand for coal and iron ore in China, as well as congestion in major ports in Brazil and Australia.

 

In China, the world's biggest soybean importer, rising ocean freight costs are deterring traders from importing soybeans, with one Beijing trader saying that he hasn't heard of any soybean import deals being struck in the past week.

 

Ocean freight costs for panamax-sized cargoes on the U.S. Gulf-China route have risen by around US$35/tonne since the beginning of the year to US$100/tonne.

 

Among other major Asian sea-routes, the U.S. Gulf-South Korea panamax freight cost is now US$95/tonne, up from US$80/tonne a month ago, while U.S. Gulf-Taiwan is currently US$80/tonne, up US$10 from a month ago.

 

In other news, Taiwan's wheat importers may soon have to worry no longer about the government rejecting wheat shipments with traces of the pesticide malathion.

 

Taiwan's Ministry of Health is seeking public comments on a move to allow 0.5 parts per million of malathion in imported wheat. The step may be implemented over the next two months.

 

Last month Taiwanese health officials rejected a 9,000-metric-tonne shipment of U.S. wheat due to traces of malathion, raising concerns that it may lead to a wheat shortage in Taiwan.

 

Taiwan currently has a zero tolerance for malathion in wheat.