Asia Grain Outlook on Friday: Soy, corn likely down on ample supply
The U.S. demand and supply report for agricultural commodities will likely be issued tonight and traders in Asia expect it to be bearish.
The January contract for soybeans will likely to fall below US$9 a bushel on the Chicago Board of Trade in the near term, said a Japan-based analyst for soft commodities. The contract is currently around US$9.40/bushel.
"The general perception is that production and yield figures may be revised higher for soybeans in the new USDA report," said a grains trader in Tokyo.
He added old crop soybean inventories have declined substantially but a large replenishment is on the cards. The effect of cold weather on yields is unlikely to be factored in before December or January, he said.
According to the trader, corn and soybean purchases will likely be sluggish over the next few weeks.
Traders said China has ample corn and soybean stocks and importers are well covered for November-December shipments.
They added China's soybean imports will likely be lower in 2010 versus 2009.
Also, South Korea is in no hurry to make purchases.
"There is enough (corn and soybeans) available for this year. We are looking at making purchases only for April shipment," said a Korean Feed Association official.
He added the association will issue tenders only if prices are considered attractive.
Wheat purchases are being made across Asia but supplies are ample and any price rise will likely be mainly due to a weak dollar, said an analyst in Singapore.
The Taiwan Flour Millers' Association is unlikely to issue a tender to import wheat for the next two weeks as enough volumes are available, an industry official said.
Japan's Ministry of Agriculture has sought 52,200 metric tonnes of wheat and 31,700 tonnes of barley in a simultaneous buy sell, or SBS, tender.
Shipments will have to take place between November this year and January 2010.
The tender closes Oct. 29, the official said.
Japan's Ministry of Agriculture, Forestry and Fisheries Thursday bought 149,000 tonnes of wheat in a tender.
Stocks Weigh On Rice Prices; Philippines Tenders Eyed
Rice prices are also under pressure as Thailand, the world's largest producer, is saddled with large inventories; but they may get some support if the Philippines buys to meet a local shortfall.
Thailand's white rice prices will likely move in a US$480-US$520/tonne range in the near term for 5% brokens, said Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand.
He said the country has stocks of around 6 million tonnes on a milled basis and the upcoming harvest can add to that volume.
"All eyes are on the Philippines. It is likely to make purchases soon and prices will hinge on the size of the purchases," said Chookiat.
He said though Vietnamese rice is cheaper than Thai rice by more than US$100/tonne, Thailand still expects to sell a considerable amount to the Philippines.
Traders said Vietnam has already made most of its rice sales for the year.
In other news, Korea Agro-Fisheries Trade Corp. Friday reissued a tender to import 44,577 tonnes of brown rice for January-February shipment, a senior official said.
The tender was originally issued Sept. 22 but purchases couldn't be made because prices quoted by buyers were too high, the official said. The new tender closes Oct. 16.
The imports are being made in compliance with a World Trade Organization Minimum Market Access quota, he said.