Grain prices in Asia are likely to be mostly lower in coming sessions, tracking movements on the bellwether Chicago Board of Trade, where the outlook for corn, soybeans and wheat futures has turned weaker on improving weather and bearish external factors.
Regional rice prices are expected to rise, however, on the back of bullish import news from India and the Philippines, while an extension to a Thai government rice buying program will provide further price support, traders said Monday.
On CBOT, corn, wheat and soybean prices slumped Friday and continued to decline in Asian trading Monday, with participants attributing the fall primarily to external factors--notably a rise in the value of the dollar--though prices are also coming under pressure from forecasts of drier weather in the U.S. corn belt this week.
Friday, CBOT's December corn contract ended down 13.50 cents at US$3.66 a bushel and continued to decline in Asia Monday. At 0700 GMT, December corn on e-CBOT was trading down 2.40 cents at US$3.63/bushel.
Wheat futures also tumbled Friday on an improving harvesting and seeding outlook for the U.S. Midwest and Plains, with Chicago prices sinking to the lowest levels in almost three weeks.
At 0700 GMT, December wheat was down 0.60 cent at US$4.93/bushel, while November soybeans were trading down 1.00 cent at US$9.79/bushel.
CBOT rice prices meanwhile have risen to their highest levels this year amid growing supply concerns. At 0725 GMT, e-CBOT's November contract was up 16.00 cents at US$14.52.
India's state-run PEC Ltd. floated a tender late Friday for importing 10,000 metric tonnes of rice, an announcement on its Web site showed.
The country will be importing the grain for the first time in several years to meet a possible shortfall after getting the lowest rainfall in 37 years.
Two other state-run companies--State Trading Corp. of India (512531.BY) and MMTC Ltd. (513377.BY)--also floated similar tenders Friday.
The Philippines, meanwhile, is expected to import record volumes of rice next year following damage to paddy in the wake of three typhoons in recent weeks.
Traders at a rice conference in Cebu last week said the country was expected to import up to 3 million tonnes of rice next year, from 1.775 million tonnes this year.
Robert Papanos, a trader with Seacor Commodity Trading LLC, said market information indicates the Philippines will import a minimum of 2.35 million tonnes in 2010. That volume slightly exceeds the country's record imports in 2008, when shipments soared to 2.3 million tonnes.
Rice prices in Thailand, the world's largest exporter, have risen steadily. Monday, Thai 25% broken rice was being offered at US$418/tonne compared with around US$414/tonne early last week, FOB basis, and traders said prices are likely to rise further still in coming sessions following a recent government announcement that it would buy up to 2 million tonnes of paddy directly from farmers.
According to a Friday U.S. Department of Agriculture attache report, Thai rice exports (including fragrant rice) during the Jan. 1-Oct. 16 period fell 21.9% on year to 6,817,874 tonnes.
Unofficial exports (excluding fragrant rice) for Oct. 19-25 totaled 145,259 tonnes, up 42,863 tonnes from the previous week. Exports of white rice during the Jan. 1-Oct. 25 period totaled 4,916,257 tonnes compared with 6,770,868 tonnes during the same period of the previous year, the USDA attache report said, citing data released by the Department of Foreign Trade, Ministry of Commerce.
