November 21, 2008
Grain prices will likely keep falling next week, as a stronger dollar and the global economic crisis keep the markets bearish.
The falling prices have resulted in some Asian importers staying on the sidelines, holding back corn and feed wheat purchases until prices fall some more.
In Friday's electronic trade, Chicago Board of Trade grain futures extended overnight losses.
At 0533 GMT, CBOT December corn contract was trading 8 cents lower at US$3.55 a bushel, while December wheat was trading 5.2 cents lower at US$5.06/bushel. January soybeans were trading 8.4 cents lower at US$8.47/bushel.
In deals this week, Japan's Ministry of Agriculture bought 100,000 metric tonnes of U.S. wheat in a tender concluded Thursday.
Earlier in the week, Iraq is said to have bought 60,000 tonnes of Vietnamese 5% broken white rice in an inter-government deal. No official confirmation of the deal has been available so far.
The price of the deal couldn't be ascertained, but 5% broken rice is currently being quoted at US$400/tonne in Vietnam.
In other news this week, South Korea's Daewoo Logistics said it plans to plant corn and oil palm across 3.2 million acres in Madagascar to ensure a stable food supply for South Korea and cut its reliance on imports.
The company hopes to produce 4 million tonnes of corn and 500,000 tonnes of palm oil a year from this venture.
In bearish news for global wheat prices in the near term, India's 2009 wheat crop is likely to be higher than the bumper crop harvested in 2008, thanks to favorable weather conditions and an expected increase in acreage.
"The current status of the wheat crop is very good," said Jag Shoran, project director of the government's Directorate of Wheat Research, based in the northern state of Haryana.
India's wheat crop is being currently sown and will be harvested from March onward.