December 5, 2007

 

Asia Grain Outlook on Wednesday: Wheat prices may rise, tracking CBOT

 

 

Wheat prices are likely to keep rising the rest of the week, tracking the bullish trend in wheat futures on the Chicago Board of Trade.

 

CBOT wheat futures have been rising on strong export demand globally.

 

During the week, Japan's Ministry of Agriculture announced a tender to buy a total 195,000 metric tonnes of U.S., Canadian and Australian wheat, to be concluded Thursday.

 

India's state-run PEC Ltd. is also seeking to buy at least 330,000 tonnes of wheat in a tender. PEC opened the bids for the tender Monday, although the tender may be awarded by Saturday.

 

PEC's tender attracted large amounts of Argentine wheat. The bids received were between US$395.88/tonne and US$418.95/tonne.

 

Soybean prices may rise despite slower Chinese buying as soybean futures continue to gain on CBOT on worries over La Nina weather conditions producing drier weather in Brazil and Argentina.

 

Chinese companies have slowed down fresh soybean imports the past 10 days after several weeks of frenzied importing to cool down domestic edible oil prices.

 

In other news, the scenario isn't looking too good for India's main winter-sown oilseed crop, mustardseed.

 

Mustardseed output looks unlikely to cross 6 million metric tonnes in 2008 compared with 7 million tonnes in 2007 due to a slower pace of sowing, said D.P. Khandelia, a member of industry lobby group Solvent Extractors' Association of India's mustardseed promotion council.

 

However, Khandelia added that sowing could pick up in the next seven to 15 days, if there are adequate rains and if temperatures become cooler.

 

"Sowing can go on until Dec. 15, so it's not like all hope is lost for acceleration in mustardseed sowing," he added.