Bearish on rice, wheat, corn and soyabean: Rabobank

The International Grain Council estimates 2016's world harvest of rice to be at 473 million tonnes. This is the first decline in output since 2010 due to drought in the three major producers of rice which are India, Vietnam and Thailand. This has led to a spike in rice prices. Also, soyabean has also seen a price hike by 25 percent due to flooding in Argentina and a dry weather in Brazil. Corn is another crop that can be impacted due to this.Stefan Vogel, Global Sector Strategist, Grains & Oilseeds, Rabobank, however, said grain prices had factored in a lot of such news and is now bearish on rice, wheat, corn and also soyabean. "The world still has enough to supply," he said.Below is the transcript of CNBC-TV18's interview with Stefan Vogel, Global Head Of Rabobank.Q: What is your sense coming in on the international grain council report and how bigger a worry is it at this point?A: We see a couple of very interesting things happening in the grain market recently and a lot is driven by the South American weather. May be the most remarkable over the last 12 weeks is that Soybean prices increasing by about 25 percent and this is really driven by a lot of flooding in Argentina while at the same time we see heavy dryness in parts of Brazil. So, if you take that we see that the Soybean crop there has declined substantially and on the other hand also parts of the Brazilian corn crop is at risk. If you take both of that, it basically means that there is more demand for North American grains that need to be either processed in the country and produced and exported as commodities or they have to go directly as grains or oil seeds on the export market and this has clearly lent a lot of support recently to the global grain markets in Chicago.Q: Where do you see a bigger concern coming in? Would you say that the Soybean prices have factored in this issue and what about the rest of the grains?A: Soybean prices as well as corn prices have factored in a lot. We have seen also a lot of fund investments in these areas which turned their position from a net short into a net long position. We are slightly bearish on a lot of these grains right now and feel that there is a bit over done or the markets are bit overdone and we think that the world still has enough to supply but from a situation where two months ago everybody thought it is very plentiful, we are now in a situation where a lot of these markets are balanced or on the oil seed and specially on the Soybean side we are in a situation where, we see the production to fall quite a bit below the demand side. Q: So, when it comes to Soybean or corn and rice and wheat where do you see more price rise coming in for the rest of this season then?A: Corn prices may have already been priced relatively fair. I think Soybean prices as I mentioned have taken on a lot of these risks and already priced them a little bit too high. So, as you mentioned we are slight bearish on grains as well as on the Soybean side. However looking at India, I think also on the wheat side India is facing challenges this year and will may be rely on higher imports than some people think in the market.