Asian grains prices are likely to get support over the next few days from strong demand and concerns that recent floods may have dragged down acreage in the U.S., trade participants said Wednesday.

"After the recent long liquidation, prices seem to have bottomed out for the time being and another rally is on the cards," said a Singapore-based executive with a global commodities trading company.

The U.S. Department of Agriculture is due to issue acreage and stockpiles reports on Thursday, and many traders are covering short positions and rebuilding long positions in preparation for what is expected to be bullish data, said Hiroyuki Kikukawa, general manager for research with Japan-based commodities brokerage Nihon Unicom Inc.

Most traders expect near-month wheat, corn and soybean contracts on the Chicago Board of Trade to rise at least 20 cents a bushel in the next few days on the back of strategic buying by investors. The July contracts are currently trading around $6.49/bushel, $6.96/bushel and $13.38/bushel, respectively.

The corn contract has already tumbled more than $1.0/bushel since it hit a record high of $7.9975/bushel on June 10. In past few days, wheat prices have fallen to their lowest level in almost a year.

The recent fall in prices has given a boost to physical buying of grains, which in turn will help prices to recover, traders said. Many importers had been keeping to the sidelines since late last month, but have been attracted back into the market by lower prices.

Since June 16, buyers in South Korea have purchased at least 537,000 metric tons of corn and 220,000 tons of feed wheat for arrival in the September-November period. Tenders to import another 220,000 tons of feed wheat will be finalized later Thursday.

Feed grain corn was purchased at $339.99-$351.49/ton, on a cost-and-freight basis, and food grade at $340.50-$358.37/ton. Feed wheat was purchased at $288-$297/ton, C&F.

Japan has also purchased close to 500,000 tons of corn in the past two weeks for shipment in August and September. It is seeking 16,000 tons of food wheat for shipment by Sept. 30 in a sell-buy-sell tender to be finalized on July 5.

Taiwan Sugar Corp. will tender Thursday to buy 23,000 tons of corn and 12,000 tons of soybeans for shipment in August.

Export interest is a little stronger for corn at this point of time, said Karl Setzer, a U.S.-based analyst with MaxYield Cooperative.

Buyers are actively seeking cargoes because prices may rise again, said an executive at a Tokyo-based commodities trading company. More than 2.0 million acres of corn has been lost to floods in the U.S., and inventories there are already at a 15-year low, he said.

Source: Dow Jones Newswires