April 17, 2009

Soybean prices may keep rising in the near-term led by continued Asian demand.

"The big picture (for soybeans) remains a strong demand outlook, as Asia's mandate for a more protein-rich diet continues to keep world inventories and U.S. supplies declining," said U.S.-based grains analyst Tim Hannagan.

More protein-rich diets imply a larger proportion of meat and poultry, which in turn leads to higher demand for soymeal as feed products.

In other news, Japan's Ministry of Agriculture imported 5 million metric tonnes wheat in the financial year ended March 30, 2009, around 9% lower than the previous fiscal year.

"After the tainted rice scandal took place in September, there were no wheat imports for almost two months, leading to a fall in annual imports, even though there was no erosion in wheat demand," said the trader, declining to be named.

The Japanese government, which is that country's only wheat importer, sells the imported wheat to private flour millers at predetermined prices.

In September, Japan was rocked by the discovery pesticide- and mold-infested imported rice has been used to make rice-based snacks and wine, leading to a temporary halt in rice and wheat imports.

Meantime, India is likely to lift a ban on export of wheat and white rice, as soon as a new government is sworn by early June. The country is currently in the midst of a general election.

Analysts said that the new government will have little choice to scrap the ban on wheat and white rice exports, which was put in place last year, as the state granaries are overflowing. As the country is currently harvesting a wheat crop and will harvest a paddy crop in September, more storage space in state granaries would be sorely needed.

Analysts estimated that at least 3 million to 5 million tonnes of wheat and an equal quantity of rice will have to be exported this year to prevent a glut in the domestic market.