April 6, 2004

Spanish Consumer Buying Interest For Corn Rises
 
Consumer buying interest on the Spanish market has picked up especially for corn positions up until July since last week, while buying interest for wheat remains scant as corn is more competitively priced in comparison, traders said Monday.
 
"We've definitely had a pick up in demand after the very slow situation in March when consumers were covered. For several days now we've had clear signs of buying interest, some for April-May, and even more for June-July for corn," a Spanish trader said.
 
Wheat's competitiveness on the Spanish market is not only undercut by better-priced corn but also other grains such as sorghum and feed barley, traders said.
 
"Many consumers have returned to the market and last week we had some last- minute hand-to-mouth coverage of March and April," another traders said.
 
Most corn being bought originates in France's South West and is driven over the border by truck: "People are prepared to pay pretty high prices ex- farm, to which the comparatively high handling costs of transport by truck has to be added. There is no maritime business at the moment.
 
"People waited for a very long time to cover, and some now have to pay the price," he added.
 
French corn, basis free-on-board Bayonne was quoted at EUR160 a metric ton April-June, and at EUR164/ton July-September.
 
Meantime, Spanish consumers keen to cover and were paying around EUR166/ton on an ex-farm basis for corn July-September, traders said.
 
Spanish consumers were also eager to buy feed barley, traders said.
 
"Clearly people try and buy as little as possible ahead of the new crop like in any other year, even though this year it's more extreme due to the much higher prices, but now they had to come forward," a trader said.
 
Buying interest for new crop grains is only speculative presently with trade on new crop "not started yet," the trader added.
 
Plenty of rain is also raising hopes for a strong domestic grain harvest, even though consumers and the trade is conscious of the unpredictable weather changes typical for Spain: "For now we had a lot of rain, but this can change very quickly," a trader said.
 
This paired with uncertainty over the amount of Black Sea grain available for the next marketing year has resulted in almost no new crop buying interest, traders said.
 
"We don't even have prices yet for any of the new crop," a trader said.