August 4, 2011


Asian grain prices expected to remain stable



Asian grain prices are likely to remain stable amid weather concerns in spring crop areas in the US, according to a Dow Jones report.


Sluggish demand among Asian buyers may prevent sharp price gains, said trade participants.


Investors and analysts put the immediate price range for most active December wheat and corn futures contract on the Chicago Board of Trade at US$7.40-US$7.80/bushel and US$6.90-US$7.30/bushel respectively.


For CBOT November soy, they peg the range at US$13.70-US$13.90/bushel.


"It is a weather-driven market at the moment, though some of the investors have already factored in the above-normal US temperatures," said a Singapore-based executive with a global commodities trading company.


The breaking of deadlock in the US to raise the debt ceiling has eased the downside risk in dollar-denominated CBOT futures.


The US is the world's largest exporter of agricultural commodities and sells millions of tonnes of wheat, corn and soy to Asian buyers. Asian countries such as China also have large exposure to the US debt.


Hot weather in the US Midwest could affect corn yields and is supportive of prices, said Koname Gokon, deputy general manager at Japanese commodity brokerage Okato Shoji Co.


Searing heat continues in the South Central US this week, Commodity Weather Group said in a note.


Several forecasters have now released 2011 US corn and soy yields that are well below the current government estimates, ANZ Banking Group said in a report.


Some analysts forecast US corn and soy yields as low as 150 bushels/acre and 41.3 bushels/acre, much lower than the forecast of the USDA of 158.7 bushels/acre and 43.4 bushels/acre.

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