November 21, 2007

 

Asia Grain Outlook on Wednesday: Soybean prices may continue to soar

 

 

Soybean prices may continue their relentless gains in the remainder of this week, tracking expected gains in Chicago Board of Trade soybean futures.

 

CBOT soybean futures are rising on soaring crude oil futures and continued demand for soybeans from China.

 

Analysts are calling US$12 a bushel the peak for soybean prices. January soybean was at US$10.83/bushel at 0632 GMT.

 

"I expect soybean prices to continue to rise as long as crude petroleum rises. It's likely to rise just a bit more, but level out in the US$10 to US$12 per-bushel range," said Peter Golbitz of commodities information firm Soyatech LLC.

 

Dorab Mistry, respected palm oil analyst, also pointed out US$12/bushel as a likely high for soybean futures at an industry conference in China Tuesday.

 

In other commodities, wheat made some gains on CBOT Tuesday on weather concerns for Argentine and U.S. wheat and good export demand. But experts don't expect wheat to break out of the consolidation mode it has been in since late September.

 

In other wheat-related news, India's federal government may decide on awarding bids from a tender to buy an unspecified quantity over the weekend. It will likely buy 350,000 metric tonnes of wheat through the tender, government officials indicated.

 

The tender, floated by state-run company MMTC Ltd., is the first in a series of tenders planned over the next several months to secure up to 1 million tonnes from the world market.

 

Meantime, India's wheat sowing, which started in early October, has so far not been very encouraging with acreage lagging last year's level.

 

If this trend continues, India could face a shortfall in wheat output in 2008 and remain an active wheat importer, which will be supportive for global wheat prices.

 

In import deals this week, Japan's Ministry of Agriculture bought 150,000 tonnes of wheat from the U.S., Japan and Australia in a tender concluded Tuesday.