December 19, 2007

 

Asia Grain Outlook on Wednesday: Wheat prices may fall on CBOT trend

 

 

Wheat prices may fall during the remainder of this week, tracking weakness in Chicago Board of Trade wheat futures.

 

After reaching a record high Friday, CBOT wheat prices have receded in the last couple of days on profit-taking and the absence of fresh leads.

 

India's wheat crop, sowing of which will likely conclude by the end of this month, is being keenly watched because sowing has so far lagged behind last year's levels.

 

If the 2008 crop output in India is significantly lower than 2007, this could lead to India stepping up wheat imports, straining already tight global stocks.

 

In deals this week, Japan's Ministry of Agriculture is seeking a higher-than-usual amount of wheat in its weekly tender.

 

The government has sought a total of 280,000 tonnes for shipment between January and April from the U.S. and Canada. The tender will conclude Thursday.

 

In other news, South Korea's Korea Corn Processing Industry Association rejected all bids in a tender to buy 165,000 tonnes of corn Tuesday. It's not known whether the association will seek a fresh tender.

 

Meanwhile, India's State Trading Corp. has received a disappointing response to its tender to import 350,000 tonnes of wheat.

 

It received only three offers in the range of US$459.99-US$579.62/tonne from global trading firms Cargill, Glencore and Toepfer.

 

"This (the response to the tender) clearly shows that globally, there is no wheat available," said Avinash Raheja, a senior commodity analyst at local brokerage firm Commtrendz Risk Management Services.

 

STC is likely to announce the results of the tender next week.