SINGAPORE (Dow Jones)--Grain prices on the bellwether Chicago Board of Trade
were little changed in thin volumes in Asia Friday, following a similar
rangebound session in the U.S. overnight.

  Traders said the market is likely to continue to focus on weather
developments in coming sessions, with generally favorable crop weather in key
corn and wheat growing areas of the U.S. fueling expectations of good yields,
while rice traders continue to monitor India's weak monsoon situation.

  However, despite expectations of a reduction in India's rice crop this year
as a result of poor monsoon rains, the international market has yet to react,
traders said.

  In China, recent rains in the northern parts eased the impact of a prolonged
drought in major soybean and corn producing areas, according to the Office of
State Flood Control and Drought Relief Headquarters.

  Drought-hit crop areas were 10.07 million hectares as of Thursday, 600,000
hectares more than last year's average, the office said.

  In India too, a late revival in monsoon rainfall has fueled hopes it will
help limit damage to the country's summer crops and prevent further increases
in food prices, but it may be too little and too late to lower prices
substantially, industry participants said.

  "If rainfall continues like this, there is a possibility that yields would be
a little higher, but we can't increase the area (under paddy cultivation) at
this point of time," said Sonal Varma, an economist with Nomura Securities.

  India's biggest rice producing state, West Bengal, expects its summer-sown
rice output to fall 10%-12% in the 2009-10 fiscal due to insufficient rains,
the state agriculture minister said Thursday.

  The state reaped 14.8 million metric tons of rice in 2008-09, of which 10.6
million tons came from the summer-sown crop.

  India's rainfall in the June 1-Aug. 17 period was 27% below the 50-year
average, hurting crop prospects in 246 of the country's 625 administrative
districts.

  CBOT rice futures eased in very thin volume Friday. At 0548 GMT, e-CBOT's
November contract, the only month traded so far, was down 8.00 U.S. cents at
$13.36 following a marginal rise in U.S. trading overnight.

  CBOT rice is expected to continue finding technical pressure, that has so far
pulled the September benchmark contract 57.50 cents lower so far this month,
traders said.

  Wheat futures were also marginally lower Friday, with e-CBOT's September
contract down 0.40 cent at $4.68/bushel as of 0555 GMT, following a similar
lackluster U.S. session.

  In India, however, the outlook for wheat prices continues to lean towards the
bullish side due to drought-related crop concerns and an apparent delay in the
government's plans to release wheat stocks, traders said.

  "Despite the (government's) decision to release 3 million tons of wheat, the
stocks are yet to reach the local market," said Sushil Global Commodities
Analyst Ashish Tapadia.

  In Japan, the Ministry of Agriculture is considering lowering the prices of
imported wheat for the second time this year, the Nikkei reported in its Friday
edition.

  The government imports 90% of the wheat Japan consumes, selling the grain to
flour millers. Prices are revised in April and October to reflect international
market rates.

  Global wheat prices surged from 2007 to 2008 due to higher demand in emerging
nations, droughts that hit exporting countries and the inflow of speculative
funds. As a result, the government raised prices twice in both years.

  In other news, Japan's Ministry of Agriculture said it purchased 126,000 tons
of U.S. and Australian wheat for October delivery in a tender concluded
Thursday.

  Meanwhile, South Korea's Dongah Flour Mills purchased 25,000 tons of U.S.
wheat from Cargill Thursday, said a trader with the company, declining to give
price details.