January 9, 2008

Asia Grain Outlook on Wednesday: Soybeans may rise on crude, china buying

Soybean prices are likely to keep rising in Asia for the rest of the week, riding on the firm trend in crude oil futures and expectations of higher Chinese demand.

On the Chicago Board of Trade, March soybeans closed up 17 1/4 cents at US$12.67 per bushel in overnight U.S. trade. In Asian hours, the bullish trend continued, with March soybeans now up 6.4 cents from the New York close at US$12.73/bushel.

While the bullish outlook for crude oil prices is the major driver of soybean and soyoil prices, Tuesday's decision by the Chinese government to import 1.1 million tonnes of soybeans to support domestic prices will also support prices in coming weeks.

The government will import the soybeans by early February in time for the spike in demand for edible oils during the Chinese New Year festivities.

For wheat and corn, Asian markets saw a flurry of import deals this week, after a lull last week.

On Thursday, Japan's Ministry of Agriculture is likely to buy 156,000 metric tonnes wheat in a tender.

So far this week, South Korea's Nonghyup Feed Inc. has bought 385,000 tonnes of optional-origin corn in a tender. Three South Korean flour mills - Daehan, Daesun and Samhwa - have bought 23,000 tonnes U.S. No. 1 wheat in a tender, while the Taiwan Flour Mills Association bought 80,000 tonnes U.S. No. 1 wheat in a tender.