Asia Grain Outlook: Prices May Fall On Ample Supply

SINGAPORE (Dow Jones)--Asian grain prices are likely to come under pressure for the rest of this week due to ample
supply and limited demand, trading executives said Wednesday.

The recent declines in prices have made purchases attractive, and import deals are also being contracted for wheat,
corn and soybeans, but the volumes aren't sufficient to prop up the market, they said.

December corn futures on the Chicago Board of Trade ended 1 1/2 cents, or 0.4%, higher Tuesday at $3.56 1/2 a bushel.
November soybeans ended 5 3/4 cents, or 0.6%, lower at $8.94 1/4. July wheat futures closed unchanged at $4.32 1/4 a
bushel.

"The crop conditions for corn and soybeans in the U.S. Midwest region are very good and planting progress has been
positive," a Tokyo-based commodities analyst said. "This may drag down prices even further."

Weak fundamentals are also weighing futures prices, he said.

Traders said that with a large soybean crop in the U.S. anticipated this year, CBOT November corn futures may soon
fall to $8.70/bushel.

The fall in prices is narrowing the spread between July and November soybeans, they said.

Strong Chinese demand for tight, old-crop U.S. soybeans has kept a floor under prices for some time now, but more and
more bearish indicators seem to be lining up, ANZ Banking Group said in a research note.

China has ample soybeans, and physical buying is likely to be slow for the next month, a trader in Singapore said.

Traders estimated corn prices will fall further, with the CBOT December contract likely to weaken to $3.50/bushel or
below within the next few days.

Chinese corn buying touted by many market participants as a potential buttress for prices hasn't materialized so far,
while the U.S. is expected to harvest a record crop, they said.

Concerns last month that China would require hefty imports have eased, with expectations for an early local harvest
encouraging and the government conducting ongoing auctions from its reserves, ANZ.

The China National Grain and Oils Information Center said Wednesday that it expects domestic corn output this year to
rise 2.5% to 168 million metric tons due to higher acreage.

Asian buyers are contracting some grain purchases to take advantage of the recent fall in prices, while others are
waiting for a further downward move.

The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association Tuesday bought 45,000 tons of Brazilian
soybeans from Cargill Inc. at $2.42/bushel over CBOT August soybeans.

Taiwan Sugar Corp Tuesday passed on a tender to import 23,000 tons of corn and 12,000 tons of soybeans, citing high
prices.

South Korea has bought wheat cargoes for feed use after prices on a delivered basis fell below $200/ton.

Global trading companies Bunge Ltd. (BG) and Alfred C. Toepfer International GmbH have each sold 55,000-ton cargoes of
feed wheat to South Korea's Major Feedmill Group at $198.39/ton, on cost and freight basis, excluding two-port delivery
charges of $1.50/ton, trading executives said Wednesday.

Last week, another feedmaker in South Korea, Nonghyup Inc., bought a cargo of 55,000 tons of feed wheat for delivery
by Oct. 10 at $199.95/ton, C&F, excluding second and third port delivery charges of $1.50/ton each.

-By Sameer Mohindru, Dow Jones Newswires; +(65) 9455-2449; sameer.mohindru@dowjones.com

(END) Dow Jones Newswires
06-09-10 0731ET
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