Asia Grain Outlook: Wheat, Corn Likely Continue Fall From Highs

SINGAPORE (Dow Jones) - Grains of Asia 's prices are likely to continue to fall from recent highs this week, as importers wait and see if acquisition opportunities arise in the midst of global market volatility, executives trade, said on Wednesday.
China is making serious investigations of feed wheat from Australia for delivery in the second half of the year to take advantage of a great discount of up to $ 80 per metric ton of U.S. corn due to the tight supply of corn, they said.
The near month May corn futures contracts on the Chicago Board of Trade reached a record high of $ 7.8375 a bushel earlier this week, but has now fallen about $ 7.57/bushel.
Prices of wheat futures on the CBOT fell briefly below corn futures for the first time in 15 years Tuesday, and now are about $ 7.61/bushel.
Traders expect wheat futures to trade CBOT corn lower again in the coming days, but not sure what the levels of grain will find support.
Many expect that wheat and corn futures fell to $ 7.40/bushel or less this week.
"Many importers of grain is following a" wait and see [approach] and fresh purchases are slow in coming, "although some buyers are making inquiries, said a Singapore-based executive with a global trading company.
He said that buyers and sellers are ready for prices to stabilize before going for another round in the physical marketplace.
Price movement is likely to be in a tight range over the coming days, said Koname Gokona, vice general manager of Japanese commodity brokerage Okato Shoji Co.
He said that if corn prices stay high, demand for corn could fall to importers substitute feed wheat.
The more degrees of feed wheat from Australia are still trading around U.S. $ 310/ton, cost and freight to destinations in Southeast Asia, unchanged from last week, said an exporter.
He said the impact of the weakening of the future takes time to reach CBOT grain markets of Australia, who have their own foundations to track.
The market is increasingly concerned about the developing situation in Japan after the government announced that the nuclear situation is not as bad as happened in Chernobyl in 1986, said Karl Setzer, a US-based analyst with MaxYield Cooperative.
He said this could affect demand for commodities.
An unexpected move by the U.S. Department of Agricultureto maintain its forecast for U.S. corn stocks at the end of the season without changes in its monthly report released Friday also weighed on prices.
The market expectation was that the USDA revised down its forecast for ending stocks of corn in the marketing year ending Aug. 31. U.S. is the largest exporter of corn, with more than 50% of world trade.
The USDA kept its forecast for corn ending stocks unchanged at 17. 14 million tonnes, a minimum of 15 years.
But it lowered its estimate for the closure of the wheat stocks in major exporting countries of the United States - Argentina, Australia, Canada and the European Union.
Forecast is cut 6% of its previous forecast of March, at 27.22 million tonnes.