July 16, 2007

 

Asia Grain Outlook on Monday: Premiums may fall on rain in US Midwest

 

 

Premiums of corn and soybean delivered to Asia may fall in the next few days as bearish rain in U.S. Midwest will likely keep pressure on Chicago Board of Trade futures.

 

In Asian hours trading Monday, the CBOT November soybean contract was down 22.4 U.S. cents from Friday's U.S. close at US$9.26 a bushel.

 

"More rain means better growing conditions for U.S. soybean crops and the market is reacting to this bearish news," said a Beijing-based trader.

 

Traders said rain and thundershowers forecast for the U.S. Midwest will likely put pressure on soybean and corn prices.

 

Meantime, Chinese soybean crushers should keep their soybean imports very low in the next few weeks.

 

"Demand for soymeal in China is quite weak, while international soybean prices are quite high. I think soybean imports are likely to remain quiet for some time," said a trader in a Beijing-based grains trading firm.

 

One to two soybean import shipments were booked last week, he said.

 

In other news, Indonesia's wheat imports in the first five months of 2007 were up 10.8% on year at 1.74 million metric tonnes, said Ratna Sari Loppies, executive director of Association of Wheat Flour Producers of Indonesia.

 

Wheat-flour products were cheaper than rice-based meals for most Indonesians, leading to higher wheat demand for wheat, she said.

 

In the past few days, few import tenders were reported in Asia. The largest was Japan's Ministry of Agriculture buy tender for a total of 100,000 tonnes of U.S., Canadian and Australian wheat last week.

 

Last week, Taiwan Sugar Corp. bought 29,000 tonnes of U.S. corn and 16,000 tonnes of U.S. soybeans from trading house Columbia Grains for August shipment.

 

The corn will be supplied at US$239.07/tonne and the soybeans at US$391.48/tonne.