September 20, 2011

 

Asia's grain traders see buying opportunities
 

 

As higher-than-expected crop data weigh on prices, grain traders in Asia are observing recent price declines for buying opportunities.

 

Buyers in South Korea, which is one of the world's largest feed grain importers, seek more than a million tonnes of feed corn and feed wheat, trading executives said Monday.

 

There may also be interest from Japan, which hasn't bought even 25% of its intended purchases of the 3.2 million tonnes of feed-grade corn it requires for October-December shipment, trading executives said Monday.

 

"Japan is also slow in finalizing prices of the imports made so far because traders are expecting a downward correction in prices," a global commodities trading company executive said.

 

US corn yields may be revised upwards to 149-150 bushels/acre in the next few months due to a better-than-expected crop in many states, Frank Kralicek, member of the Asia Advisory Team to the US Grains Council, said on the sidelines of an international agriculture conference in Bali Sunday.

 

The USDA, in a monthly report last week, pegged the average corn yield at 148.1 bushels/acre, down from an earlier forecast of 153 bushels--but still expected to be the third-largest harvest on record.

 

On Friday, CBOT December corn slid nine cents, or 1.3%, to US$6.92 a bushel, settling 6% lower than a week earlier and 11% lower than a contract high reached in late August.

 

There is also a downside risk for soy since global prices of oilseeds and oilseed products are likely to fall in the next few weeks in tandem with corn prices, Thomas Mielke, editor-in-chief of the Hamburg-based journal Oil World said Monday.

 

Roy Bardole, chairman of the US Soybean Export Council said that the USDA's demand and supply report last week forecast this year's US soy production at about 84 million tonnes - down from last year's 90 million tonnes, though estimates may be revised upward over the next few months as the harvest progresses.

 

Bardole said Sunday the near-month soy futures contract on the Chicago Board of Trade may fall below US$13/bushel, toward US$12.50/bushel, within the next six months. The most-active November contract is currently trading around US$13.55/bushel.

 

CBOT November soy, the most actively traded contract, fell 3 1/4 cents, or 0.2%, to a one-month low of US$13.55 1/2 a bushel Friday. The losses left the contract down 5% for the week and 7.5% from a three-year high reached in late August.

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