September 5, 2011


Asian grain prices to increase amid bullish leads



Although Asian grain prices are likely to increase in the following week after bullish leads from the US, physical buyers may still purchase them, according to trade participants on Friday (Sep 2).


According to Dow Jones, traders said they expect the USDA monthly demand and supply report to paint a bullish outlook, prompting importers to secure purchases in a rising market.


Outlook is more bullish for soy than for corn, but the USDA will likely cut yield and production estimates due to recent unfavourable weather, the deputy general manager at Japanese commodity brokerage Okato Shoji Co. said.


Investors may take long positions on CBOT ahead of the USDA report, he said.


At 0142 GMT, the most active December wheat and corn futures on CBOT were US$0.07 and US$0.09 higher at US$7.68 a bushel and US$7.4750 a bushel, respectively. November soy is US$0.09 higher at US$14.4350 a bushel.


Most traders and analysts expect wheat, corn and soy prices to test at US$7.80, US$7.60 and US$14.60 a bushel in the next few days.


There are indications that US farm yields are lower than expected this year, and this is pushing the prices higher, a Singapore-based executive with a global commodities trading company said.


After the recent long liquidation, investors are going long again, he said.


Research firm FCStone has pegged US corn yields at 146.3 bushels an acre, around 6.9 bushels lower than its previous forecast. The USDA put the corn yield at 153 bushels an acre, so a downward revision is likely.


Asian physical buyers, who have stayed on the sidelines for several weeks now, will likely resume buying as they fear that prices may rise even further.


"The last significant South Korean purchase of soymeal and corn was around August 10, and buyers may hold some corn import tenders next week for November arrivals," a Seoul-based trading executive said.


Japan will likely start buying wheat next week for November shipment, traders in Tokyo said.


The Taiwan Flour Millers' Association returned to the international wheat market Thursday (Sep 1) after almost two months on the sidelines, buying 53,170 tonnes of US wheat.

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