PBOC dampens grains market
Updated: 2010-12-28 10:19
By Luzi Ann Javier (China Daily)
MANILA, the Philippines - Wheat, corn and soybeans declined in Chicago after China raised interest rates for a second time since mid-October, damping demand for agricultural commodities.
March-delivery wheat declined as much as 2.2 percent to $7.66 a bushel on the Chicago Board of Trade, before trading at $7.7625 at 9:34 am Manila time. Corn for March delivery lost 0.8 percent to $6.0925 a bushel, while soybeans for delivery in the same month slipped 0.4 percent to $13.55 a bushel.
"Obviously, this interest rate hike dampened the sentiment in the grains market," Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore, said on Monday. Still, he said soybeans, corn and wheat may resume their rally, driven by concerns about tightening global supply.
China, the world's biggest soybean importer, will auction 300,000 tons of the oilseed and 1.8 million tons of corn from reserves on Tuesday, the National Grain & Oil Trade Center said on its website. The Asian nation is the world's largest corn user after the United States. China's corn imports may rise to 3.5 million tons this season, more than triple the US Department of Agriculture's 1 million ton estimate, as the Asian nation tackles inflation, Ker said. China's inflation was 5.1 percent in November, the highest level in 28 months.
Russia delayed a decision to scrap a 5 percent duty on corn and barley imports after the country's worst drought in at least 50 years, the government said on Friday.
Argentina may have severe dryness and temperatures of 100 degrees Fahrenheit in the 16 days from Sunday, Chicago-based QT Weather said in a report on Sunday. Argentina is the world's third-largest soybean exporter, according to the US Department of Agriculture.
The Buenos Aires Cereals Exchange cut its estimate for this year's planted soybean crop by 200,000 hectares to 18.5 million hectares because of dry conditions, it said in a Thursday statement.
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