February 2, 2009
South Korea's grain purchases heighten on South American drought
Feed makers in South Korea are snapping grains aggressively on worries that the drought in South America may further drive up prices, said traders.
South Korean feed makers Nonghyup and Korea Feed Association imported 155,000 tonnes of corn for arrival in April, and more deals may soon be sealed for May shipments, traders said.
Nonghyup, South Korea's largest feed maker, is also seeking up to 130,000 tonnes of feed wheat for June arrival.
CBOT corn prices have increased to US$3.80 per bushel from US$2.90 in December. The increase is largely due to the drought in Argentina where the corn crop is in the crucial pollination stage.
Recent rainfalls in Argentina have brought some relief, but experts said it was not enough to reverse crop damage and more rain were needed.
Argentina's corn production could decline as much as 40 percent from a year ago, and the wheat harvest was estimated to be the smallest in 20 years, the Buenos Aires Grains Exchange said.
