September 24, 2007

 

Asia Grain Outlook on Monday: Wheat prices may continue gains on CBOT

 

 

Prices of imported wheat in Asia are likely to keep rising in Asia this week, tracking continued strong fundamentals.

 

In Asian trading hours Monday, on the Chicago Board of Trade, the most active December wheat futures contract, is currently trading 14 U.S. cents at US$8.88/bushel.

 

A number of bullish factors combined to drive up wheat prices. On top of concerns about a lower-than-expected wheat crop, there are expectations that Russia may announce measures to limit wheat exports this week.

 

Overall demand for wheat in Asia continues to be robust. However, import plans of random players such as India and Pakistan are likely to take solid form only over the next several weeks.

 

While the government of Pakistan has said it may import up to one million tonnes of wheat, Indian government officials could meet next month to decide on wheat imports for the rest of this year.

 

China's feed demand is likely to rise at least 10% next year on higher consumption by hogs next year.

 

Analysts said that China's pork supply, hit by blue ear disease, may rebound by mid-2008, boosting feed demand next year.

 

In expected import deals this week, Japan's Ministry of Agriculture is likely to import wheat in a tender to be announced later Tuesday.

 

At an industry conference in India's Goa province over the weekend , Govind Bhai Patel, a well-regarded oilseeds analyst, said that India's summer oilseed production is expected to be around 15.52 million metric tonnes, up from an earlier trade estimate of 15.15 million tonnes.

 

He said that actual oilseed production figures are likely to beat earlier estimates because of late monsoon showers in main oilseed producing provinces of Gujarat and Madhya Pradesh.

 

Patel said soybean production of around 8.7 million tonnes can be expected in the November 2007-October 2008 period, against an earlier estimate of 8.6 million tonnes.

 

India's summer-sown oilseeds crop, including soybean, peanuts, sunflower seed and sesame seed, are sown from June to September and harvested in October and November. These crops rely almost totally on the June-September monsoon rains for sustenance.