November 5, 2011
Asian grain prices may push lower next week due to harvest pressure in major producing and exporting countries, traders said Friday (Nov 4).
An ample supply of wheat from Australia and corn and soymeal from Ukraine and India is weighing on prices, they said.
The futures prices on the Chicago Board of Trade (CBOT) are also likely to be under downward pressure and most traders expect a correction of 5-10 cents/bushel.
The near-month December wheat and corn futures contracts on CBOT are currently trading around US$6.35-$6.55 a bushel respectively. The November soy contract is around US$12.35/bushel.
Impact of a record 2011 Brazilian crop is continuing to be felt in the international market, analysts said, adding that Brazil and Argentina harvested a record 125 million tonnes of soy in 2011.
This has partly offset the anticipated lower crop in the US, the world's largest exporter.
Indian soy harvest is at its peak and exporters continue to clinch soymeal export deals for shipments up to January.
The Soy Processors Association of India has revised upward the soy production estimate for the summer-sown crop by almost 300,000 tonnes to 11.94 million tonnes.
Vietnam has purchased at least two cargoes totalling up to 30,000 tonnes of Indian soymeal this week for shipment in December. Traders said deals were likely between US$378-$382/tonne, basis cost and freight.
Australian and Black Sea region wheat continues to flood the market. East Asian buyers are snapping up Australian feed wheat cargoes due to the latest slump in prices amid a bumper harvest and large inventories.
In the last three days, several major suppliers were very active in selling feed wheat to Vietnam, said a Ho Chi Minh City-based trader.
Vietnam has purchased three bulk cargoes totalling up to 100,000 tonnes of Australian feed wheat this week, paying US$270-$274/tonne, C&F, for shipment between December 15 and end-February.
Australia was saddled with multi-year-high wheat stocks of 8.6 million tonnes on October 1 and stocks will be little changed a year later despite strong exports, the International Grains Council (IGC) said last week.
In the US, the world's largest corn exporter, the corn supply is tight but buyers are turning to cheaper producers such as Ukraine.
IGC has revised upward Ukraine's corn exports forecast by 4.7% to nine million tonnes in the marketing year to June 30. Ukraine exported five million tonnes of corn in 2010-11.