March 3, 2010

 

Asia Grain Outlook on Wednesday: Physical buying may support prices

 

 

Asian grain prices are likely to get support this week from upcoming purchases in the physical market, with several countries shopping around to meet their milling and feed requirements, trade participants said Wednesday.

 

"After the lull during the Lunar New Year holidays, the market seems to be getting active again," said a Singapore-based exporter.

 

He said Indonesia, Malaysia and Vietnam are seeking cargoes of corn and soymeal for shipment between May and July.

 

At least one panamax vessel of South American corn--around 60,000 metric tonnes--is being sought by buyers in Malaysia for May shipment, traders said.

 

They said Malaysia is looking for corn purchases around US$230/tonne, basis cost and freight. Buyers in Vietnam are also sniffing around for cargoes around the same price levels.

 

Taiwan's Maize Industry Procurement Association is seeking up to 60,000 tonnes of U.S. or South American corn in a tender to be finalized soon.

 

"Due to short covering in futures markets, prices have risen in recent days, and some traders want to finalize purchases before any further gains," said a Tokyo-based trading executive.

 

He said several deals in wheat, corn, barley and soymeal are expected over the next week.

 

Japan Wednesday bought 137,800 tonnes of feed barley and 7,200 tonnes of feed wheat in a sell-buy-sell or SBS tender.

 

Japan is seeking 132,000 tonnes of food wheat from Australia, the U.S. and Canada in a tender that will be concluded Thursday.

 

Importers in Vietnam want to buy close to 460,000 tonnes of soymeal for May-July shipment around US$360-US$370/tonne, basis C&F.

 

"Most feed millers have covered only 15%-20% of their soymeal needs for the May-July period. One or two millers may have covered 50%, but all are now actively seeking cargoes," said a Ho Chi Minh City-based trading executive.

 

He said part of the requirements will be met through spot purchases, with the rest through forward purchases priced against CBOT soymeal futures.

 

Vietnam-based buyers said they are seeking shipments at prices around US$360-US$370/tonne, basis C&F.

 

Malaysian crushers want to buy between 80,000 and 100,000 tonnes of soybeans for shipment in May and June, likely from South America.

 

Traders said Malaysia is seeking delivered cargoes at a US$1.50 premium to Chicago Board of Trade soybean prices.

 

CBOT May soybean futures rose 1 cent or 0.1% Tuesday to US$9.63 1/2 a bushel.