Asia Grain Outlook on Monday: Wheat prices under pressure; buyers quiet

 

 

Wheat prices are likely to remain under pressure in coming sessions amid a combination of bearish Chicago Board of Trade futures, ample global stocks and sluggish regional import demand.

 

Wheat futures on the bellwether Chicago Board of Trade rebounded Monday after Friday's tumble, though traders said the overall bearish outlook remains, which will likely also help keep prices in Asia under pressure.

 

The focus now, however, will turn to a U.S. Department of Agriculture crop report due Tuesday, they said.

 

At 0645 GMT e-CBOT December wheat was trading 4.60 cents higher at US$5.02 a bushel, with traders attributing the rise to short-covering and buyers in Asia likely to remain quiet this week due to broad expectations that global prices will fall.

 

"There's no direction at the moment for wheat prices, but the general outlook remains weak on ample global stocks," said Koname Gokon, commodities analyst with Okato Shoji Co. "There's not much in the way of buying interest at the moment, and that is unlikely to change until the market shows some sense of direction."

 

Weekly U.S. wheat export sales, announced Thursday, were 284,500 tonnes, below trade expectations of 300,000-500,000 tonnes.

 

Traders said Asian importers are generally covered, having bought well in September.

 

However, according to a USDA attache report issued Friday, South Korea's wheat imports in the 2009-10 marketing year are likely to increase by 600,000 metric tonnes compared with a year earlier to 3.9 million tonnes, due primarily to an increase in feedmeal demand.

 

In eastern Australia, around a quarter of a harvest of new winter crops including wheat has been completed, and as with last year, growers are choosing to warehouse their crops and consider their options rather than sell immediately, GrainCorp Ltd.'s (GNC.AU) Corporate Affairs Manager David Ginns said Monday.

 

Growers are waiting for the market to offer prices they feel are appropriate, he added.

 

A shipping schedule for GrainCorp, which has annual grain handling capacity in excess of 20 million tonnes, shows a total of 4.36 million tonnes of grain booked for export through the end of October, of which 3.96 million tonnes is wheat.

 

In other regional grain news, the Philippines will seek to buy up to 600,000 metric tonnes of rice in a tender to be held Dec. 1, the state-owned National Food Authority said Monday.

 

The agency wants to the buy 25%-broken grade rice for shipment between February and April next year, with possible sources including Thailand, Vietnam, China, Pakistan, Australia, U.S. and India.