August 8, 2007

 

Asia Grain Outlook on Wednesday: Corn, soybean likely volatile on weather

 

 

Corn and soybean prices will likely be volatile in the week to Friday, due to unpredictable weather conditions in U.S. soybean and corn growing regions.

 

Over the past two Chicago Board of Trade sessions, soybean futures fluctuated, ending lower on Monday due to weekend rains, but ending higher on Tuesday following concerns of dry weather in the southern soybean belt.

 

Corn futures, like soybean futures, are also weather driven at this point, as sowing of the two crops continues in the U.S.

 

In Asia, high ocean freight costs will likely keep most buyers at bay. So far this week, no corn or soybean import tenders have been reported from major importing nations such as South Korea and Taiwan.

 

In the only major Asian tender announced so far this week, Japan's Ministry of Agriculture, Forestry & Fisheries is seeking a total of 131,000 metric tonnes of U.S., Canadian and Australian wheat in a tender to be concluded Thursday.

 

The ministry is also likely to conclude a tender to buy 44,000 tonnes of feed wheat and 341,000 tonnes of feed barley in a simultaneous buy-sell, or SBS, tender to be concluded later Wednesday.

 

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

 

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

 

In other news, India is expected to produce around 13.7 million tonnes of oilseeds during the ongoing summer-sowing season, up 6.2% from a year earlier, because of a likely rise in soybean and groundnut production, a senior industry official said.

 

"We feel soybean production should rise by 15% on-year to 8.86 million tonnes, while groundnut production should be around 3.90 million tonnes, up from 3.46 million tonnes last year, as plantings have been good this year," said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd., which is one of India's biggest soybean product companies.

 

India's summer-sown oilseeds crop, which have mostly been sown, will be harvested from late September.