November 10, 2008

          

Asia Grain Outlook on Monday: Soybean may gain on USDA, China plan

                   

 

Soybean prices may rise in the week ahead, as the fundamentals look bullish.

 

The U.S. Department of Agriculture will issue its monthly crop report later Monday, which is expected to show lower soybean yield and output in the U.S. for the crop currently being harvested.

 

Meanwhile, news China is planning a US$586 billion economic stimulus plan is also potentially good news for soybean prices, said an analyst Monday.

 

"The stimulus may boost the production of soy products, such as soybean oil and soybean meal, which could stimulate soybean imports," said Koname Gokon, deputy manager with Tokyo-based commodities brokerage firm Okato Shoji Co.

 

Gokon said Chicago Board of Trade January soybean contract could climb up to US$10 a bushel in the next few days.

 

At 0711 GMT, January soybean was trading at at US$9.46/bushel, 25 cents higher than Friday's U.S. closing.

 

But another analyst said the overall impact of China's stimulus plan would be limited for grains.

 

"My feeling is the China stimulus impact on grains futures is a feel-good one, like say Barack Obama's victory. But overall, it won't affect grain fundamentals," said Nicholas Chung, manager of the commodities team at Korea Development Bank.

 

In other news, member countries of the South Asian Association for Regional Cooperation Friday decided to set up a food bank with 243,000 metric tonnes of food grains for meeting food emergencies in member countries, according to a report in India's Hindu newspaper.

 

India will contribute the lion's share of 153,200 tonnes for the bank, with varying contributions coming from other members.

 

The member countries of SAARC are India, Pakistan, Bangladesh, Sri Lanka, Maldives, Nepal and Bhutan.