Asia Grain Outlook on Friday: Corn, wheat prices may fall; rise in supply

 

 

Corn and wheat prices in Asia may decline slightly in the coming sessions, amid rising corn supply in China and talk in India of the government releasing wheat stocks, participants said Friday.

 

The market talk in India is the government may soon release 500,000 metric tonnes from stockpiles, which were around 28.5 million tonnes as of Oct. 1.

 

China's corn prices in major producing areas are likely to remain pressured due to increasing supply, though prices in major consumption areas in the south rebounded this week as adverse weather delayed some cargoes and stocks at ports fell significantly.

 

Meanwhile, the government sold 252,100 tonnes of corn in auctions this week, or 8.4% of the 3.01 million tonnes it offered.

 

Soy prices in major producing areas rose in the week to Friday, as farmers held on to the fresh harvest in anticipation of the government's decision on a supportive purchase price, participants said.

 

Prices in Suihua in Heilongjiang province were CNY3,600/tonne, up from CNY3,560/tonne last week.

 

In Jiamusi, also in Heilongjiang province, prices were CNY3,540/tonne, up from CNY3,520/tonne.

 

"Trading volumes in the new crop have not been large, as most people are still awaiting the government's announcement," said Li Xiaoli, an analyst with Beite Futures.

 

Chicago Board of Trade grain futures rose across the board in electronic trading Friday, following a mixed session in the U.S. overnight, during which rice and soy contracts drifted lower while corn and wheat pushed higher.

 

However, traders said Friday's gains were due to recent dollar weakness rather than fundamentals.

 

Meanwhile, Australia's wheat production in this crop year will reach 23.0 million tonnes, up 500,000 tonnes from a September estimate and, if achieved, up 7.5% from actual output of 21.4 million tonnes in the previous year ended March 2009, National Australia Bank Ltd. (NAB.AU) said in a forecast.

 

Above average rainfall across much of the Australian wheat belt in September lifted yield expectations, said the bank's General Manager of Agribusiness, Khan Horne, mentioning South Australia state and areas in western Victoria state in particular, with production in some of these areas to be the highest on record.

 

In other news, India's government Friday said seed availability for the winter-sown crops was more than enough to meet demand.

 

A total of 1.53 million tonnes of seeds will be available, compared with a demand of 1.38 million tonnes, it said in a statement.

 

The sowing of winter-sown crops picks up in the first week of November and continues until January.

 

India has removed a 70% import duty on some grades of rice, the Zee Business television channel reported Thursday.

 

The move follows a sharp rise in grain prices in the domestic market. India's crop has suffered due to a weak monsoon, followed by flooding in some areas.