Asia Grain Outlook on Wednesday: Corn, wheat subdued; india rice deficit looms
Prices of corn, wheat and soy in Asia are likely to come under pressure during the next few days, in anticipation of a bumper U.S. harvest, but rice may gain with India likely to scrap its import duty, said trade participants.
"Prices of parboiled rice have already started rising as there's strong demand from African countries such as Nigeria. All eyes are on India, where the crop is likely to be lower," said Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand.
He said Thailand's parboiled 5% broken rice is selling at US$620 a metric tonne, free-on-board.
A ministerial panel in India's federal government has approved doing away with the 70% import duty on rice until September 2010, local news agency Press Trust of India reported Monday.
Traders said if India starts importing even small volumes of rice next year, it can push up prices dramatically.
"Everything has changed so quickly. At the beginning of this year, it was expected that India would be a major exporter of rice," said Chookiat.
He said Thailand is expected to export 600,000 tonnes of rice this month, down from 700,000 tonnes in August, but volumes are expected to rise from October onwards.
Around 50% of Thailand's rice exports are of parboiled varieties. Vietnam is leading in white rice sales due to its cheaper rates around US$380/tonne, FOB, for 5% brokens, much lower than Thailand's US$520/tonne, Chookiat said.
Corn, Wheat Prices Subdued
"The outlook for corn is bearish for the rest of the week," said a Tokyo-based trading executive.
He said the U.S. Department of Agriculture is likely to release its report on demand and supply of agricultural commodities by the end of this week.
The general perception is that the forecast for the harvest size of corn and soy is likely to be sharply higher than last year and may weigh on prices, said the executive.
This may push up corn purchases by Asian buyers in the near term, but due to ample supplies, it's unlikely to support prices.
Taiwan's Maize Industry Procurement Association, formerly known as the Members Feed Industry Group, is seeking 60,000 tonnes of U.S.-origin corn in a tender to be completed later this week, an official said.
In wheat, supply continues to exceed demand.
"There is plenty of wheat around and only routine purchases are being made," said a Singapore-based executive at a global trading company.
Japan's Ministry of Agriculture, Forestry and Fisheries is seeking 133,000 tonnes of wheat in a tender to be concluded Thursday.
Chicago Board of Trade December wheat ended 12 3/4 cents lower Tuesday at US$4.59 a bushel.
Soft wheat production in France, the European Union's largest producer of wheat, will increase 1.1% this year to 37.3 million tonnes and its hard wheat crop by 2.1% to 2.2 million tonnes, according to the latest government data.
Soy Weak On US Crop; Support From China
Supplies of soy from the previous crop are tight, but anticipation of a bumper harvest has prevented any major rise in prices.
CBOT September soy futures Tuesday settled 8 cents higher at US$9.69/bushel, and November soy finished 14 1/2 cents higher at US$9.36 1/2 per bushel.
Traders termed it as a reprieve from the recent slide in prices.
"Many importers (in China) have already booked their soy shipments for October/November/December well in advance," said a Beijing-based executive at a global trading company.
China still has ample stocks of soy in its state reserves.
The Chinese government sold the highest volume of reserve soy during its weekly auctions Wednesday, amid output concerns.
It sold 29,300 tonnes of the crop, or 5.9% of the 497,900 tonnes it offered to sell, the highest volume since the weekly auctions kicked off in late July.
The China National Grain and Oils Information Center, a state-supported think-tank, cut its 2009 output estimate for soy Wednesday due to a drought by 500,000 tonnes to 14.5 million tonnes, down 6.7% on year.
