April 15, 2009
Asia Grain Outlook on Wednesday: Soybean may rise on China; weather to weigh
Global soybean prices may rise in the short term on unabated demand from China, while wet weather in the U.S. may tempt growers to plant more of that crop instead of corn, weighing on rates in the remaining part of the year.
China remains a steady buyer of soybeans since the start of the year, Luke Chandler and Ricardo Scaff, analysts with Rabobank said in a report Tuesday. It is still buying U.S. soybeans, departing from a typical trend of switching to South American grades from April as new crop starts to arrive from Brazil and Argentina, the report said.
China imported 3.86 million metric tonnes of soybeans in March, up 66% from a year earlier, according to the General Administration of Customs Friday. The Asian nation is boosting shipments as processors avoid buying the local crop, which is more expensive because of purchases being made by the government to build stockpiles.
Still, the wet weather in the U.S. is likely to prompt farmers to plant more soybeans, which is easier to grow under such conditions than corn. In addition, a contraction in feedmeal demand due to the current global economic downturn and a fall in the use of biofuels as regular gasoline and diesel prices decline may suppress soybean products' consumption, lowering prices in the medium term.
The report expects soybean prices on the Chicago Board of Trade to hover around US$9/bushel in the remaining part of this year. At 0631 GMT, CBOT May soybean contract traded at US$10.37/bushel, up 1 cents from Tuesday's pit-trade close.
Separately, a U.S. Department of Agriculture report e-mailed Tuesday said that Indonesia's wheat imports are estimated to increase by 5.8% on year to 5.2 million metric tonnes in the marketing year ending June 30.
"Several wheat flour importers becoming wheat millers is the major factor behind this increase," said the USDA report.
Japan's Ministry of Agriculture has yet to float a wheat import tender for April, the first month of the country's 2009-10 fiscal year.
Officials couldn't confirm when the government - a monopoly wheat importer - would kick off its wheat buying program for 2009-10.
