SINGAPORE (Dow Jones)--Wheat and corn prices in Asia could find the upside
potential limited in coming sessions, despite gains in China's corn prices this
week and a rise in India's wheat futures.

  Markets will likely continue to be heavily influenced by expectations of
bumper corn and wheat harvests in the U.S., and the recent onset of rain in
Australia is helping to soothe earlier concerns about the wheat crop there,
traders said.

  Any potential weakness in prices in coming weeks, however, will likely
encourage Asian buyers to step up imports, as most have been buying on a
hand-to-mouth basis while waiting for the new U.S. crops to bring prices down,
traders said Friday.

  Indian wheat futures rose to a four-month high Friday following a farm
ministry proposal to hike the minimum support price and an increase in festival
demand.

  In China, corn prices continued to rise this week, supported by ongoing
drought concerns and a recent increase in demand from the country's feedmeal
industry, traders said.

  Earlier this week, the China National Grain and Oils Information Center, a
state-supported think-tank, cut its corn output estimate for this year by 1
million tons to 165.5 million tons, despite an increase in acreage forecast.
The estimate implies a 0.3% decline in output from a year earlier.

  Data issued Friday showed China's corn exports in August were little changed
from a month earlier at 11,908 tons, although that is down 53% from the same
month last year.

  However, the relatively low volumes of corn that China exports means the news
will have little impact on regional prices, traders said.

  In Australia, the recent onset of rain has helped soothe concerns about the
approaching wheat harvest.

  In a monthly commodities report issued Friday, Rabobank said it has kept its
forecast for Australian wheat production this year at 22.8 million tons intact,
though "some regional adjustments have been undertaken to the forecast model,
with upside in some regions effectively canceled by downside in others."

  "Recent rainfall arrived just in time to prevent further downgrades to crop
conditions, particularly in Queensland and New South Wales...with this rainfall
the potential for an El Nino event appears to have been pushed aside for the
moment," Rabobank said.


  Rice Prices Supported by India Drought


  Rice prices in Asia may continue to find support from drought-related crop
reductions in India, with recent rains in the south of the country having now
eased, said forecaster Meteorologix.

  India's rice output will fall 7%-8% on year to 91 million-92 million metric
tons in the fiscal year ending March 2010, from 99.15 million tons produced
last year, Agriculture Minister Sharad Pawar said earlier this week.

  Vietnam, meanwhile, will likely harvest 7.5 million metric tons of paddy from
its summer-autumn rice harvest, which is 90% complete, while an existing rice
stockpiling scheme will be expanded by 500,000 tons to around 1 million tons to
try and help stabilize falling domestic prices, said Huynh Minh Hue, general
secretary of Vietnam Food Association.

  Under the scheme, a group of 21 exporters and trading firms will buy 500,000
tons of paddy directly from farmers at a fixed price of 3,800 dong a kilogram
($0.21/kg), compared with the current market price of 3,400-4,000 dong/kg, he
said.

  In other rice news, Japan has resumed rice imports, buying 33,000 metric tons
of Thai and U.S. rice in its first overseas purchases this fiscal year, a Japan
Agriculture Ministry official said Friday.

  Japan produces around 8.8 million tons of paddy annually and imports 767,000
tons every year as part of an international agreement. Last year Japan exported
137,000 tons of rice to undisclosed countries as part of a food aid program, he
said.

  Meanwhile, data released today showed China's soybean imports rose 21% to
29.61 million tons on year, largely as expected. With imports forecast to rise
in the coming months, the global market should continue to find support, though
the focus will stay on the U.S. and South American producing countries, all of
which are expected to see their production rise this year, traders said.

  China's imports of soybeans are likely to increase in the November-December
period to around 4 million metric tons each month, the China National Grain and
Oils Information Center said in a report Thursday. In August, China imported
3.13 million tons of soybeans.