SINGAPORE (Dow Jones)--Grain prices in Asia may get a lift in the coming days
following a short-covering induced bounce on the Chicago Board of Trade Friday,
though the market will also focus on reports China is set to start releasing
its state grain reserves as early as this week.

  In Asian trading Monday, e-CBOT grains were trading mostly higher though
volumes were generally light due to a public holiday in Japan.

  CBOT grains were up Friday, although traders attributed the rise primarily to
short-covering ahead of the weekend, with spillover support also coming from
recent firmness in crude oil prices.

  At 0650 GMT Monday, e-CBOT's September wheat contract was trading 5.60 U.S.
cents higher at $5.47 a bushel, after having risen by 8.50 cents Friday.

  Traders in the U.S. Friday said CBOT wheat has further upside potential from
short-covering, as funds continue to hold large net short positions.

  In India, however, traders Monday said the outlook for National Commodity and
Derivatives Exchange wheat futures is now leaning towards the bearish side due
to high domestic stockpiles.

  "Most of the granaries in the northern region are stuffed with wheat, which
is keeping the market under pressure. The stocks may head into the local market
to make space for summer-sown crops," said a trader in Delhi.

  Rice prices, meanwhile, bucked the trend to settle lower Friday, with CBOT's
September rice contract down 10.50 cents, weighed down by an improvement in the
weather in some key southern U.S. growing regions.

  However, strong technical charts and drought concerns in some growing areas
in Texas will likely be viewed as supportive.

  Meanwhile, the weak start to the monsoon season in India, where three states
have now declared drought, could heavily impact summer crops, including wheat
and rice, observers said.

  Summer crops are usually sown with the arrival of monsoon rains in June and
July, and harvested by October, but sowing has been delayed for many crops due
to scanty rains in the northern states of Punjab, Haryana and Uttar Pradesh and
the northwestern state of Rajasthan.

  India's annual monsoon rains were 27% below normal in the June 1-July 15
period, and if the rains are below 90% of the long-term 50-year average, the
government may have to officially declare a drought.

  However, the focus will also stay on the Thai government's expanding milled
rice stockpile, which now stands around 7 million metric tons.

  Though specifics on how and when the world's biggest rice exporter will begin
to release its stockpile remain unclear, market observers have previously said
the country will be forced to sell sooner rather than later, and in any case
before the main Thai rice harvest gets under way in November.

  At 0640 GMT Monday, e-CBOT's September rice contract was up 3.50 cents at
$13.00 a hundredweight.