Asia Grain Outlook on Wednesday: Prices may ease, focus stays on weather
Grain prices in Asia are likely to ease in coming sessions, with quiet trade expected, though the market is continuing to monitor the progress of Typhoon Ketsana through the region, traders said Wednesday.
While rice production in the Philippines may fall around 3 million-4 million metric tonnes below a 17.8 million-tonne target for this year as a direct result of the storm and flooding, the country is unlikely to step up imports, officials said. The Philippines has already lost around 180,000 tonnes of rice paddy in the wake of Ketsana.
"It's a substantial portion of rice to lose but inventories are sufficient, so it is not a worry," said Rex Estoperez, spokesman for the National Food Authority. "We have no plans to increase imports now but that may change when a full assessment is carried out."
Government rice stocks currently stand at 1.27 million tonnes, or the equivalent of 36 days of supply, he said.
Previous forecasts had pegged the Philippines' rice production this year at 17.8 million tonnes - a near 4% increase from a year earlier - "though we may now fall short of that target by around 3-4 million tonnes due to the typhoon," Estoperez said. The country has imported 1.57 million tonnes of rice so far this year compared with a total of 2.5 million tonnes in 2008.
Ketsana has since made landfall in Vietnam, but traders said the country's main Mekong Delta rice growing region has escaped the brunt of the storm.
Separately, Vietnam's September rice exports may fall 21% from a year earlier to 350,000 metric tonnes, the government's General Statistics Office said Tuesday. Vietnam exported 417,000 tonnes in August, valued at US$167 million, according to revised figures from the GSO. It is estimated to have exported 4.98 million tonnes of the commodity in the first nine months of the year - a 34% increase compared with a year earlier.
Traders have previously said Thailand and Vietnam's rice exports, particularly to Africa, have received a boost in recent months from the extension of India's export ban.
Still, the Thai Rice Exporters Association said last week that it expects September parboiled rice exports from the country to Africa to decline by around 100,000 tonnes this month from a recent monthly average of 300,000 tonnes, due to slowing demand and ample stockpiles.
China's corn prices were mostly flat amid sluggish demand in the run up to the eight-day National Day holiday, which commences Thursday, while prices fell slightly in some areas as output from a new crop started to reach the market.
Prices in major producing Shandong province were around CNY1,890 a metric tonne, down a tad by CNY10/tonne from a week earlier, said Xiong Mingqi of Beite Futures.
The U.S. Grains Council Monday forecast a 9.7% decline from a year earlier in Chinese corn production to 148.79 million tonnes this year due to drought, but said government stocks of the commodity were enough to meet demand.
The country sold 2,000 metric tonnes of soy, or 0.4% of the volume offered from its state reserves in a weekly auction Wednesday, the National Grain and Oil Information Center said.
Cheaper imported soy and anticipation of a record U.S. harvest, are making the domestic commodity less attractive to crushers because of China's CNY3,750/tonne floor price.
Overall regional grain buying interest is likely to remain muted in coming sessions amid a general sentiment that global prices could ease on expectations that the U.S. is heading for a bumper harvest, traders said.
"There's still some hand-to-mouth buying taking place - Taiwan is seeking one Panamax cargo each of corn and soy for November - but the feeling is the U.S. harvests are going to be big this year and there are also large stockpiles of wheat already," said a Taiwan-based trader with a major global trading firm.
"The U.S. is expected to harvest a record soy crop this year, and with global wheat stocks high there's currently not much fundamental upside potential for corn either," he said.
