April 19, 2012

 

Asian grain's lower prices may incite demand

 

 

Trade participants said Wednesday (Apr 18) that amid an ongoing decline in prices, Asian grain demand may stage a recovery which seem to have neared a short-term peak in recent weeks following a sharp rally.

 

Near-month May corn futures on the Chicago Board of Trade, which rose 9% in just three days to end at US$6.5825 a bushel April 3--due to supply concerns--have since declined 6.6% and are now trading around US$6.15 a bushel amid profit-taking and fund selling.

Wheat prices have also declined in tandem. The CBOT May contract is hovering near corn levels. May soy futures on CBOT hit a seven-month closing high of US$14.41 a bushel last week and is now trading around US$14.15 a bushel.

 

"It is yet another opportunity for Asian buyers to lock in supply because any adverse weather during ongoing US plantings can drive up prices again," a Singapore-based executive with a global commodity trader said.

 

Corn prices may have already peaked for the time being and soy prices are also close to their peak, Nobuyuki Chino, Tokyo-based President of Continental Rice Corp, said.

 

Lower South American soy output due to drought in many regions has mostly been factored into price levels and US acreage may eventually turn out to be higher than projections, he said.

 

Japanese compound feed manufacturers expect a further fall in corn prices and haven't done the final pricing for several hundred thousand tonnes they purchased at a premium to CBOT futures, an importer in Tokyo said. Buyers in other parts of Southeast Asia have already resumed buying at current prices.

 

South Korea's Nonghyup Feed Inc. Wednesday purchased 65,000 tonnes of optional origin corn from Hamburg-based Alfred C. Toepfer International GmbH at US$296.88/tonne, basis cost and freight for July 1 arrival, trading executives said.

 

South Korea's Major Feedmill Group has purchased 55,000 tonnes of South American soymeal from Cargill at US$493.73/tonne, C&F, for July 30 arrival, they said.

 

Vietnam's animal feed miller, Proconco, has purchased 70,000 tonnes of Argentinean soymeal around US$480/tonne and US$490/tonne, C&F, for May-July shipment to Phu My and Hai Phong ports.

 

Japan has tendered to import 193,237 tonnes of milling wheat, 120,000 tonnes of feed wheat, 200,000 tonnes of feed barley, 32,000 tonnes of food and malting barley. Bangladesh is close to finalising a purchase of 50,000 tonnes of wheat and bids of another tender for the import of an equivalent volume will be opened Thursday.