January 12, 2012

 

Nonghyup Feed obtains 338,000 tonnes feed grains

 

 

In the past five days, Nonghyup Feed Inc. (Nofi) has signed contract deals of at least 338,000 tonnes of feed grains, trading executives said.

 

Nofi, bought at least 165,000 tonnes of feed wheat, 118,000 tonnes of corn and 55,000 of tonnes soymeal, setting the tone for other importers to follow suit.

 

South Korea is one of the world's biggest importers of feed grains and its purchases are closely tracked in the international market.

 

Nofi has purchased another cargo of 55,000 tonnes of optional origin feed wheat from STX Corp., at around US$262/tonne, basis cost and freight, for arrival by April 25, an importer in Seoul said.

 

On Tuesday (Jan 10), it purchased a 55,000-tonne wheat cargo for May 25 arrival at US$267/tonne from Glencore, compared with a mid-November purchase from Cargill at US$254.50/tonne.

 

This is one of the first feed wheat purchases by a South Korean buyer for May arrival, indicating an interest in meeting their requirements in advance amid rising prices.

 

Wheat prices are moving up in tandem with corn and soy prices due to concerns that prolonged dry weather in South America will result in lower yields and output.

 

Corn prices have risen sharply in recent weeks after briefly falling below US$6.00/bushel late last year. Buyers in East Asia, the world's biggest corn importing region by volume, are rushing to meet their needs in anticipation of further price increases.

 

The USDA will revise its demand and supply numbers for various crops in a monthly report due Thursday. Any lowering of output projections in the USDA report, particularly for South America, will push up prices, said a Singapore-based executive with a global commodity trading company.

 

Nofi bought a cargo of 55,000 tonnes of corn from CHS Inc. Tuesday at US$325.58/tonne, cost and freight, for arrival by April 1. Nofi's purchase of US corn on Nov. 18 was at US$315/tonne, C&F.

 

It also bought 63,000 tonnes of corn from STX for arrival by April 10 at a premium of US$1.6680/bushel over the May corn futures contract on the Chicago Board of Trade, which is now trading around US$6.57/bushel.

 

Nofi bought a 55,000-tonne soymeal cargo, on a cost and freight basis, for arrival by May 20.

 

Traders said the seller has an option to supply the cargo from India at US$376/tonne, or South America at US$381/tonne, cost and freight.

 

On Monday, Nofi purchased 55,000 tonnes of optional origin feed wheat from Hamburg-based trading company Alfred C. Toepfer International GmbH, at US$264.73/tonne, basis cost and freight, for arrival by March 15, traders in Seoul and Singapore said.