August 22, 2007

 

Asia Grain Outlook on Wednesday: Prices may rise, tracking CBOT strength

 

 

Prices of imported grains in Asia may rise in the week ahead, tracking expected strength in Chicago Board of Trade grain futures.

 

CBOT grain futures are expected to extend their gains, tracking strong export demand for both U.S. corn and wheat.

 

In Asia, soybean imports by China may remain buoyant for the rest of the week as livestock and poultry sector output recovers. Also, since Chinese buyers had been importing small quantities of soybeans over the past several weeks, stocks are running low and soybean crushing plants are seeking to build up their stocks.

 

Over the past week, Chinese crushers may have booked up to 13 cargoes of soybeans for October delivery, mostly from the U.S., and some from Argentina, said commodities analysis firm Shanghai JCI.

 

At present, the premium for soybeans delivered to China from the U.S. is at 215-260 U.S. cents/bushel to CBOT's November contract, while Argentine soybeans are commanding a premium of 270-295 cents/bushel to CBOT November.

 

Meanwhile, corn buying remained quiet in major importing nation South Korea.

 

"South Korean traders are stocked up until November, and some even until December, so no one is in a hurry to buy more corn right away," said a trader in Seoul.

 

Traders pointed out that the ocean freight cost from the U.S. Gulf to South Korea is currently at US$95/tonne, an almost 90% jump since the year began, which is discouraging buyers from booking January 2008 shipments.

 

"Traders are now going to wait and watch when the newly harvested U.S. corn hits the market in November before picking up their imports," said the manager of a grain trading firm in Seoul.

 

In other news, Japan's Ministry of Agriculture, Forestry and Fisheries is not holding its weekly wheat import tender this week. A ministry official didn't give any reasons.