October 29, 2007

 

Asia Grain Outlook on Monday: Corn, soy may surge on higher crude oil

 

 

Asian buyers may face higher prices for wheat, corn and soy on surging crude oil prices and a weaker U.S. dollar, analysts said Monday.

 

U.S. wheat futures ended mostly higher Friday, rebounding from recent losses on borrowed strength from outside markets such as crude oil, and sentiment that the market has been oversold.

 

A weaker U.S. dollar is also expected to boost demand for U.S. commodities and raise speculative buying interest.

 

However, there are concerns that export demand for wheat is slowing down after the importers front-loaded purchases early in the marketing year, said analysts.

 

For corn and soy, higher energy prices are expected to provide price support as both grains can be used in the production of biofuels.

 

Chicago Board of Trade corn futures ended higher Friday, with strong price support from inflationary-based buying.

 

December corn ended 5 3/4 cents higher at US$3.72 per bushel, and March finished 5 3/4 cents higher at US$3.88 3/4 per bushel.

 

The CBOT soy complex ended mostly higher Friday, led by soyoil as crude oil prices shot past US$90 per barrel.

 

Soybean prices in China ended higher Friday due to supply tightness as a result of heavy snowfall in major producing regions.

 

Despite tighter monetary polices aimed at curbing inflation, rising soymeal and soyoil prices have continued to boost soybean prices.

 

In India, one of the world's largest importers of edible oils, the government announced Monday that it may import around 5.6-5.8 million metric tonnes of vegetable oil in the current oil marketing year ending this month, or up to 11.5% more than the previous year.

 

Last year, India imported around 5.2 million tonnes of vegetable oils, of which 4.4 million tonnes were edible oils.