September 26, 2008

   

Asia Grain Outlook on Friday: Corn may slip on favorable U.S. weather
   

 

Corn prices may fall over the next few days as favorable U.S. weather boosts crop prospects.

 

Besides, much like other commodities, grain futures may also move sideways, until a resolution is hammered out for the bailout of the financial sector in the U.S.

 

In Asia, Japan's Ministry of Agriculture put off its weekly wheat tender, for the second time in a row, as the government is trying to sort out quality issues with its rice imports. Rice and wheat are simultaneously imported by the government. A ministry official said that wheat imports will resume soon, but didn't give any more details.

 

Pesticide-laden rice imported for making glue recently found its way into Japanese rice-based snacks and alcohol, causing a furore, and leading to the resignation of the country's agriculture minister last week.

 

In other news, Indian exporters are likely to clinch deals for exporting 300,000 metric tonnes soymeal over the next two weeks, executives of the country's soybean industry told Dow Jones Newswires.

 

They said that a gap of around US$40/tonne in bid and offer price slowed down sales over the last few weeks, but falling prices of Indian soymeal will likely spur exports.

 

Meanwhile, an oilseeds industry conference in India's financial hub of Mumbai starting Friday and extending over the weekend is expected to disclose early estimates of the country's summer-sown oilseeds crop, harvesting for which begins later next month.

 

It's widely expected that India will harvest its highest-ever soybean crop this year, at over 10 million metric tonnes, which would likely put downward pressure on Indian soymeal export prices as well as domestic edible oil prices.

 

In other news, rice prices are expected to keep falling over the next three months, as export demand remains sluggish, said traders.

 

Traders expect Thai 100% grade white rice price to touch at least around US$660/tonne by the end of the year from US$700/tonne. However, some analysts said that if India resumes rice exports in November, it would lead to a huge crash in Asian export prices, with most white rice and parboiled varieties declining to US$500-US$550/tonne by the end of this year.

 

India banned non-basmati rice exports in March to control spiraling domestic inflation, but with the country anticipating a bumper summer-sown paddy harvest, the ban may be lifted by early-November, once harvesting concludes.

 

However, lifting of the ban is by no means certain, as large parts of the country's farmlands have been affected by floods over the past month, which could hit output.
                

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