November 17, 2008
Corn and soybean prices are expected to fall in the week ahead, as fundamentals and outside markets remain bearish.
"After Informa came out with a report that corn and soybean plantings in the U.S. will rise next year, it added pressure to the already bearish market," said Kazuhiko Saito, commodity strategist with Tokyo-based brokerage Interes Capital Management Co.
Private analysis firm Informa Economics Friday predicted U.S. farmers will plant more corn and soybeans in the 2009-10 crop year than they did in 2008-09, which ends Aug. 31.
However, Informa added that wheat planting in the U.S. will likely fall next year, which is offering some support to wheat prices. The news on U.S. wheat plantings comes at a time when there's concern that Australia's wheat crop may be lower than expected.
The U.S. Department of Agriculture last week cut its Australia 2008 wheat output estimate to 20 million metric tonnes from an October estimate of 21.5 million tonnes.
Saito said export demand for corn and soybeans remains weak, which will further weigh on prices.
The Chicago Board of Trade January soybean contract will find support at US$8.50 a bushel and the December corn contract could find support at US$3.50/bushel, he said.
In morning trade in Asia Monday, the December corn contract was up 3.2 cents, at US$3.83/bushel, while January soybeans were 11.2 cents higher, at US$9.07/bushel.
In other news, India's federal government is mulling an increase in the intervention price for wheat to encourage wheat planting.
Wheat sowing in India begins next month.
India's Commission on Agricultural Costs and Prices has recommended an INR800/tonne, or 8%, hike in the intervention price of wheat for 2009 from the 2008 intervention price of INR10,000/tonne.
India is Asia's second-largest wheat producer; strong output growth would likely pressure prices in 2009 when crop is harvested in February and March.