August 7, 2009

Grains prices in Asia will likely remain under pressure in coming sessions due to a generally bearish near-term outlook for Chicago Board of Trade futures, while the market will also be focusing on a key U.S. Department of Agriculture supply and demand report due Aug. 12, traders said Friday.

 

CBOT grains declined across the board in U.S. trading overnight and were mostly lower in thin volumes in Asia Friday. Traders said a firmer dollar, a generally good weather outlook for the U.S. and sluggish U.S. exports were the main factors pulling the market lower.

 

"I imagine the market will likely be fairly quiet ahead of Wednesday's USDA report, though the outlook - particularly for corn and wheat - is leaning toward the bearish side," said Okato Shoji Co. commodities analyst Koname Gokon.

 

"There appear to be generally bearish expectations, production-wise, about the USDA report for corn particularly. (CBOT) corn could even test US$3.00 a bushel as early as next week, though I expect that to provide a solid psychological floor," he said.

 

At 0544 GMT, e-CBOT's September corn contract was trading 2.60 U.S. cents lower at US$3.29/bushel, having fallen 14.50 cents Thursday.

 

Traders attributed the fall to dollar strength, while benign weather and weak feedmeal demand from the U.S. livestock sector were also bearish factors.

 

Analysts said an estimate this week by Informa Economics that this year's U.S. corn crop would total 12.991 billion bushels, with a record yield of 164 bushels per acre, also continued to weigh on traders' minds.

 

In other news, Vietnam will export between 1 million and 2 million metric tonnes of rice between now and the end of the year, due to expected ample supply and to make up for lower rice prices compared with last year, the Ministry of Agriculture and Rural Development said Thursday.

 

Vietnam has exported about 5 million tonnes to date this year - matching a target the government set previously - but an expected harvest of 10 million tonnes of rice in the second half means more rice is available for export.

 

The Thai government opened tenders Thursday to sell up to 700,000 tonnes of rice from its total milled rice stockpile, which now stands at a likely record 7 million tonnes, said a senior Thai industry official.

 

The government plans to sell off its stockpile though a combination of private tenders and through the Agricultural Futures Exchange of Thailand as it hopes to promote and raise the profile of the exchange, said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.