October 22, 2011


Asia's grain prices expected to strengthen 



Asian grain prices will likely extend gains amid anticipated strong Chinese demand and sanguinity over the resolving of Europe's debt crisis, trading executives said Friday (Oct 21).


Prices may rise by 10-30 cents a bushel across the grains complex, with traders likely to take comfort from news that a comprehensive plan may be in place by Wednesday to bail out troubled euro-zone nations.


The most actively traded December corn futures contract on the Chicago Board of Trade closed at US$6.49 1/2 a bushel Thursday, up 1.7% from a week earlier.


Forecast higher shipments to China in the coming months due to soaring feed demand and need to restock state reserves could push CBOT corn through the psychological level of US$6.60/bushel and prompt a test of chart resistance at US$6.86/bushel next week, a trading executive in Tokyo said.


The USDA last week confirmed that US suppliers sold 900,000 tonnes of corn to China early this month.


Traders expect China's corn imports in the marketing year that started September 1 to rise to about five million tonnes, much higher than USDA estimates of two million tonnes.


CBOT November soy declined 2.4% on-week to close at US$12.25/bushel Thursday.


However, prices will likely test US$12.50/bushel if China steps up purchases to benefit from lower prices, a trading executive in Singapore said.


China's soy imports will likely rise 15% to 60 million tonnes this year due to high demand for poultry feed meal, Noble Group (N21.SG) Asia-Pacific regional grains director Thomas Daetwyler said Wednesday.


CBOT December wheat closed around US$6.30 a bushel Thursday, up 2% on-week.


Wheat prices have bottomed and are likely to rise to US$6.50/bushel next week, due to strong demand amid a more positive macroeconomic outlook, a second Singapore-based trading executive said.


Australian milling wheat for December shipment was being offered at US$280 a tonne, free on board, compared with about US$275/tonne a month ago, she said.


Ample global supplies that will likely result in a record world wheat surplus in the marketing year that started June 1 have been mostly factored in, she said.


Japan's Ministry of Agriculture, Forestry and Fisheries Thursday bought 102,652 tonnes of milling wheat for shipment in December. Japan is one of the top wheat importers and buys from the US, Canada and Australia.

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