April 23, 2009
Asian wheat buyers slow purchases, Indian corn sales to slow
Wheat importers in Asia have slowed purchases after buying aggressively over the past few weeks, and Indian corn exports are seen to slow on competitive offers from South America.
South Korea, the world's third-largest corn importer, is projected to buy less corn in the weeks ahead after contracting about 330,000 tonnes in the past few days.
Traders said wheat importers such as Indonesia, Vietnam and Malaysia were looking for July and August shipments and were not yet contracting large quantities.
Most buyers are not looking for May or June purchases as they are quite covered, said a Singapore-based trader. Buyers booked in advance as they did not want to risk port congestions such as the one experienced in Australia, the trader said.
Australian wheat is quoted slightly lower at US$250 per tonne, including cost & freight (C&F) to Southeast Asia, compared with US$260-US$270 in early April.
Buyers are lying low as they are just checking the market prices, and only a few are buying in containers, another trader said.
Japan's Ministry of Agriculture has issued a tender that closes on Thursday to buy 148,000 tonnes of milling wheat from the US, Canada and Australia.
India, which has been actively selling corn to Vietnam and Malaysia since February, are competing with corn from Argentina to Asia priced around US$205 C&F per tonne, compared with Indian cargoes just US$5 cheaper.
Argentine corn is getting cheaper, earlier it was around US$10 to US$15 more expensive than Indian corn, said a trader, adding that buyers do not mind paying US$5 more for South American quality.
Some traders said the lower quality of Indian corn was prompting buyers to shift to Argentine supplies.
Quality is becoming a problem for Indian corn as it risks buying preferences, said a trader. The crop from eastern India is coming out and quality there is usually quite bad due to poor storage and handling, the trader said.
India, Asia's top corn supplier, is currently selling about 70,000-80,000 tonnes per week mainly to Vietnam and Malaysia.
India corn futures traded higher on Wednesday (Apr 22) on improving exports, but arrival pressure from the winter crop, mainly from the eastern state of Bihar, may trim gains.
Traders estimate Indian exports to reach 800,000 tonnes in the corn marketing year ending September, up from previous estimates of 250,000 to 400,000 tonnes.
