Asia Grain Outlook on Monday: Corn buyers turn to thailand on CBOT rise

 

 

Corn prices in Asia will likely remain supported in coming sessions, with recent gains in Chicago Board of Trade futures prompting regional feedmillers to shift their attention to cheaper Thai grade corn, traders said Monday.

 

"Thai corn is now around US$10-US$15 a metric tonne cheaper than CBOT's equivalent, so there has been a significant increase in buying interest" in Thai corn, said a Taiwan-based agent for a major Japanese commodities house. "Vietnam bought around 50,000 tonnes in the past 10 days, while there is also market talk going around that China has purchased around 20,000 tonnes."

 

"Strong crude oil prices and other bullish outside-market influences means CBOT prices could rise further, despite relatively bearish fundamentals. If that happens the trend could continue," he said.

 

CBOT corn ended slightly lower Friday - down 1.00 cent at US$3.72/bushel - but recovered those losses Monday. At 0726 GMT, the benchmark December contract on e-CBOT was trading 1.60 cents higher.

 

Wheat prices also rose Monday. At 0726 GMT, the December contract was up 4.60 cents at US$5.03/bushel on e-CBOT.

 

Traders said the region's big wheat importers will likely continue buying on a hand-to-mouth basis amid the current lack of firm direction, though Japan's Ministry of Agriculture, Forestry and Fisheries is due to tender for wheat Tuesday.

 

The Taiwan Flour Mills Association will likely tender for two cargoes of U.S.-origin wheat - the first of 35,000 tonnes and the second for 39,000 tonnes - later this week, the Taiwan-based agent said.

 

Wheat prices in China's major producing areas were mostly stable in the week to Monday, with consumption still lower than preholiday levels, participants said.

 

Wheat prices in Zhengzhou in Henan province were around CNY1,960 a tonne compared with CNY1,950/tonne a week earlier, while prices in Xuzhou in Jiangsu province were unchanged at CNY1,930/tonne.

 

Farmers haven't been eager to sell wheat on hand as they have already sold most of their crop to the government.

 

In other regional news grain news, the Chinese government needs to pay more attention to the rise in soy import volumes, which has hurt the interests of domestic farmers, an official said Monday.

 

Imported genetically modified soy are cheaper than China's non-GM soy, and the country's import dependence will impact lives if availability of beans from overseas is affected, said Xiong Bilin, an inspector with the Department of Industry under the National Development and Reform Commission, China's economic planner.

 

China imported 32.36 million metric tonnes of soy in the first nine months of this year, up 13% on year, and accounting for about 60% of the country's total consumption.