January 23, 2012

South Korea purchases 225,000 tonnes wheat

Four cargoes totalling 225,000 tonnes of optional origin feed wheat for arrival in end-April and early May have been bought together by South Korean feed millers Major Feedmill Group and the Busan branch of the Korea Feed Association, trading executives said Friday (Jan 20).

South Korea, one of the world's largest importers of feed grains, has purchased at least 1.013 million tonnes, including 445,000 tonnes of wheat, since January 6, taking advantage of the latest slump in prices amid concern that they may rally due to dry weather in South America.

One cargo of 60,000 tonnes was bought from Marubeni and three of 55,000 tonnes each from Cargill Inc., Alfred C.Toepfer International and Viterra. Prices ranged from US$269.75-273.50/tonne, on a cost and freight basis. One cargo each is for arrival by April 20 and April 25, and two for arrival by May 5.

There is ample feed wheat available in Australia and the Black Sea region but prices are tracking corn and soy higher due to concern that persistent dry weather in Brazil, Argentina and Paraguay will hurt production and yields.

The prices in these latest deals are a tad higher than the US$262-267/tonne South Korea's largest feed miller, Nonghyup Feed Inc., paid for 165,000 tonnes of optional origin feed wheat earlier this month.

On January 12, the Seoul-based Korea Feed Association purchased a 55,000 tonne cargo of US wheat from CHS Inc. (CHSCP) at US$275.83/tonne, for arrival by April 25.

Various buyers bought grain at US$254.50-259.89/tonne, C&F, in mid-November. Purchases in end-June last year were at US$273.90/tonne.