March 12, 2010

 

Asia Grain Outlook on Friday: Wheat may fall; malaysia buys South American corn

 

 

Asian wheat prices are likely to be under further downward pressure on higher global inventories and aggressive sales by Australia, said trade participants.

 

"The latest data from the U.S. indicates that carryover stocks for wheat may be even higher than expected earlier," said an executive at a global trading company.

 

The U.S. Department of Agriculture has raised its global ending stock estimates for wheat by almost 1 million metric tonnes to 196.8 million tonnes.

 

U.S. wheat stocks are likely to hit a 22-year high of 1.0 billion bushels this year.

 

The executive said the latest French wheat sale to Egypt's state-run General Authority for Supply Commodities this week at US$164.55/tonne, free-on-board, indicates how sellers are undercutting each other to get business, pulling prices downward.

 

Some sellers are offering Black Sea wheat around US$155/tonne, FOB, or lower.

 

Even though Russian wheat is around US$25/tonne cheaper on a delivered basis into Southeast Asia, Australia has sold several cargoes recently in the region, said a Singapore-based exporter.

 

He said Australian Standard White wheat is now being offered around US$235-US$240/tonne on a delivered basis in Southeast Asia and hard wheat is available at US$275/tonne.

 

"Due to its quality and the logistics involved, Australian wheat will continue to be sold in Indonesia and other countries, while Russia is finding it difficult to make inroads," said another trader.

 

Thursday, the May wheat futures contract on the Chicago Board of Trade hit a fresh five-month low of USUS$4.75 1/2 a bushel.

 

In other news, Japan's Ministry of Agriculture, Forestry and Fisheries Thursday bought 152,000 tonnes of wheat in a regular tender.

 

The wheat--of U.S., Canadian and Australian origin in seven cargoes--is for shipment between April 21 and May 20.

 

Southeast Asian buyers are actively seeking corn from South America, which is reaping a bumper harvest. A cargo of 60,000 tonnes has been purchased by importers in Malaysia around US$225/tonne, basis cost and freight, for shipment in May.

 

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