July 28, 2008

 

Asia Grain Outlook on Monday: Corn, soybeans may fall on good US weather

 

 

Corn and soybean prices may fall more this week, as U.S. weather continues to be favorable for crop development.

 

But both corn and soybean futures are higher in electronic trade Monday, largely tracking gains in Friday's U.S. trading, and while fundamentals look bearish for corn and soybeans, traders are short-covering after extended losses last week.

 

At 0637 GMT, the CBOT September soybean contract was at US$14.14 a bushel, up 25.4 cents from Friday's U.S. close, while December corn was 8 cents higher at US$6.04/bushel.

 

In Asia, grain buying is quite subdued as traders wait for prices to fall further as harvesting in Europe, the U.S. and several Asian countries approaches.

 

A grain buyer in South Korea said the only deal in the past 10 days has been Nonghyup Feed Inc buying 25,000 metric tonnes of optional-origin soymeal.

 

At present, Indian soymeal is cheaper than South American soymeal in South Korea. While Indian soymeal is selling at US$510-US$520/tonne, cost and freight included, in South Korea, South American soymeal is selling at US$520-US$530/tonne.

 

However, the buyer said no deals in grains are expected in South Korea this week, as most feedmillers are well-stocked.

 

"Globally, I don't think this is a busy time for buying grains," added the buyer.

 

Last week was also slow for China's soybean imports, with traders booking only 2-3 shipments, down from more than 15-17 booked the week before.

 

In the rice market, traders said demand for white rice is slowing, with Malaysia reportedly seeking to delay a few shipments it booked earlier from Thailand because it has enough stocks.

 

Traders, however, said demand from Nigeria for parboiled rice is still robust, with expectations that it will buy up to 400,000 tonnes from Thailand over the next two months.

 

Meanwhile, traders in India continue to be on tenterhooks over the state of the oilseeds crop, as monsoon rains have been scant in oilseeds-growing regions in southern and central India this month. The oilseeds crop, which will be harvested in September and October, depends almost entirely on good rains for its development.

 

"As of now, there has been no damage to the sown crop. However, if rains continue to be lower in the coming week, then some damage could be seen," said Ramesh Malpani, a trader based in the major soybean producing province of Madhya Pradesh.
   

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