October 3, 2007

 

Asia Grain Outlook on Wednesday: Wheat prices may slide on CBOT weakness

 

 

Asian wheat buyers may get some relief this week, as soaring wheat prices may slide in line with weaker wheat futures on the Chicago Board of Trade.

 

Tuesday, CBOT wheat futures closed limit-down, as traders and investors are taking profit after wheat reached an all-time high last week.

 

It seems likely that the benchmark December contract may slip below US$9/bushel, a key psychological support, which may invite more selling.

 

In Asian trading so far Wednesday, December wheat shed a further 21.6 cents from Tuesday's U.S. close at US$9/bushel.

 

"Certainly, when prices fall that much, it's worth taking a step back to assess the situation," Commonwealth Bank of Australia said in a report, adding a cautious tonnee to the price outlook for grains after sharp overnight declines in wheat, corn and soybeans.

 

In import deals this week, Japan's Ministry of Agriculture is seeking to buy a total of 160,000 metric tonnes of wheat from the U.S. and Canada in a tender to be concluded on Thursday.

 

In other deals, the Philippines' National Food Authority said Tuesday it is seeking to buy 70,000 tonnes of corn for December shipment in a tender to be concluded on Oct. 23.

 

The NFA's previous corn purchase was in April, when it bought 130,000 tonnes of Argentine corn at US$215.48-US$215.50/tonne. Private traders in the Philippines aren't importing much corn because of high import tariffs.

 

Meantime, four South Korean flour mills, Dongah, CJ Corp., Samhwa and Youngnam, bought 25,000 tonnes of U.S. No. 1 wheat from trading house Cargill in a tender concluded on Tuesday, for delivery in November and December.

 

The South Korean flour mills bought the wheat at US$390-US$396.91/tonne.