May 2, 2007

 

Asia Grain Outlook on Wednesday: Corn prices may gain tracking CBOT

 

 

Prices of imported corn delivered to Asia may keep rising in the remaining part of this week, tracking likely gains in CBOT corn prices.

 

The U.S. Department of Agriculture reported Monday that corn planting was 23% complete in the U.S. for the week ended April 29, well below the 48% seeded last year and the five-year average of 42%.

 

Analysts are worried that late planting of corn may hurt the crop yield.

 

In Asia, the only major import news was out of India, where a government minister said the state-run State Trading Corporation may buy 1 million tonnes of wheat by July in a tender likely to be issued this week.

 

The government, keen to keep India well-stocked with wheat, has been forced to seek wheat imports as its local wheat procurement has been much lower than expected.

 

Japan's Ministry of Agriculture won't hold its weekly wheat tender this week and will resume purchases from May 8.

 

Pakistan may export up to 1 million metric tonnes of wheat in the Jan. 1-June 15 period, after which the government is likely to review the current wheat export policy, an industry official in Karachi told Dow Jones Newswires.

 

"Pakistani traders have already exported up to 250,000 tonnes of wheat to various destinations," said Mohammad Yusuf, chairman of the Karachi chapter of the Pakistan Flour Millers Association.

 

There were no major import tenders for any grains over the past two days from Asia's two big importers - South Korea and Taiwan - as most traders are well-stocked with grains in the near term.

 

However, Indonesia's chief economic adviser said Wednesday that the government will increase domestic rice procurement to ensure it has enough stocks this year to prevent inflation from spiraling up.

 

Coordinating Minister for the Economy Boediono didn't specify the quantity of rice the government would buy from domestic market.

 

Analysts are concerned that rice supply in the domestic market may not be enough after current harvest ends to prevent the price of rice from rising.

 

Looking ahead, UBS has cut its global average corn price forecast for September 2007-August 2008 to US$3.30/bushel from an earlier forecast of US$3.50/bushel.

 

The bank said an expected sharp rise in U.S. corn output and modest gains in Chinese production would likely pressure prices, even though demand may rise 3% on year, led by U.S. ethanol consumption.