July 24, 2006

 

Asia Corn Outlook: Wheat may fall; US harvest nears

 

 

Premiums for wheat delivered to Asia may fall in the week ahead, with harvesting of the U.S. wheat crop to begin soon, while the premium for corn will still hinge on weather conditions for the U.S. corn crop.

 

U.S.-based analyst Tim Hannagan said in an online commentary that wheat importers are awaiting lower cash bids, as the spring wheat harvest in the U.S. begins next month.

 

Over the last four sessions, wheat settled mostly higher on CBOT, largely on weather-related uncertainties, while corn slipped on favorable weather forecasts.

 

In Asia, demand for corn seems to be reviving in South Korea, with feed buying group Nonghyup Feed Inc., or NOFI, to float a tender to purchase 165,000 metric tonnes of optional-origin corn late Monday.

 

In addition, the Korea Feed Association bought 55,000 tonnes of corn in private negotiations with Cargill Friday.

 

The only other reported corn deal in South Korea last week was by the Major Feedmill Group, which bought up to 55,000 tonnes of optional-origin corn in private negotiations with Cargill.

 

No corn import deals were reported from major Asian corn buyer Taiwan last week.

 

In the wheat market, demand for food wheat may come from Japan's Ministry of Agriculture, Forestry and Fisheries, which has been routinely buying 80,000-110,000 tonnes of U.S., Canada and Australia-origin wheat in weekly tenders over the past few weeks.

 

Japan's weekly wheat tender announcement is expected Tuesday.

 

India's state-run MMTC Ltd. may announce the successful bids for its recently issued wheat import tender to buy up to 50,000 tonnes of food wheat.

 

Bids from four companies - Hungary-based WJ Grain, Switzerland's Agrico Trade and Finance, India's Adani Global and MMTC's wholly owned Singapore-based subsidiary, MTPL - have technically qualified for the tender.

 

This week, a fair amount of feed wheat buying is also expected. Japan's Ministry of Agriculture, Forestry and Fisheries is expected to buy 30,000 tonnes of feed wheat Wednesday, as part of the simultaneous buy-sell tender.

 

South Korea's Nonghyup Feed Inc. is also expected to buy up to 105,000 tonnes of feed wheat in a tender to be concluded late Monday.

 

Last week, Japan's Ministry of Agriculture, Forestry and Fisheries bought 91,000 tonnes of food wheat in a tender.

In South Korea, two flour mills - Dongah and CJ Corp. - last week bought 21,500 tonnes of U.S. No.1 wheat in a tender.

 

Meanwhile, wheat imports from private companies in India don't seem to have taken off over the past few weeks, after the federal government cut the wheat import duty to 5% from 50% earlier.

 

While private traders told Dow Jones Newswires that 100,000 tonnes of wheat have been contracted for import by private companies over the past few weeks, government officials said no private importers have so far sought mandatory technical clearance for such imports.

 

"If they have finalized deals and are serious, they will have to approach the (government's) Plant Protection and Quarantine directorate," a government official said.