July 7, 2008

 

Asia Grain Outlook on Monday: Soybean may keep rising on U.S. concerns

 

 

Soybean prices may continue to move higher this week, as concerns of a smaller-than-expected U.S. acreage and weather worries for the developing U.S. crop underpin prices.

 

The Chicago Board of Trade November soybean contract settled Friday at an all-time high of US$16.29 a bushel, though profit-taking in Monday's electronic trade has pushed prices lower. At 0510 GMT, November soybean was trading at US$16.05/bushel.

 

In India, soybean sowing has slowed in the past 8-10 days due to low rains in the key producing state of Madhya Pradesh. Soybean sowing is 40%-45% complete in India, with oil millers stating sowing could be completed in a week if the rains resume.

 

While high soybean prices have enthused farmers, analysts said it is too early to say whether India's soybean acreage will increase this year, as much depends on the extent of rains over the next two weeks.

 

In deals this week, Chinese traders bought 7-8 cargoes of soybeans last week, mostly from the U.S. and Argentina for delivery in July and August, commodity consultancy firm Shanghai JCI said Friday.

 

Soybean prices are rising in China's domestic market because of higher soybean meal and soybean oil prices.

 

In other deals last week, Japan's Ministry of Agriculture bought a total of 202,000 metric tonnes of wheat from the U.S., Canada and Australia in a tender concluded Thursday.

 

Last week, India banned the export of corn after hectic lobbying by domestic corn processors.

 

The ban will remain in place until Oct. 15, by which time the new corn crop will likely be harvested and the government will have a better idea of whether supply is sufficient to meet domestic demand.

 

India is emerging as a major corn exporter to Asian countries such as Malaysia and Taiwan, since China, the dominant Asian corn exporter, is exporting little corn due to its bid to control domestic prices.

 

India's absence from the Asian corn market will be a blow to Asian feed producers, as its export price is around US$120/tonne less than the U.S. price for supply to most Southeast Asian countries, largely because of the lower freight cost.