Asian buyers awaiting lower grain prices

Asian grain prices will likely remain subdued for the next few days as buyers stay on the sidelines, according to trading executives and analysts.

 

Many buyers are holding off on purchases despite a recent downward price correction, said a Tokyo-based grains trading executive.

 

July soy futures on the Chicago Board of Trade settled 16 cents, or 0.1% lower Tuesday (Apr 27) at US$9.93/bushel, and traders want prices to fall to around US$9.70/bushel before resuming purchases.

 

The CBOT July corn futures contract ended 5 3/4 cents, or 1.6%, lower at US$3.53 3/4.

 

Following the downward correction in CBOT corn prices to their lowest level in seven months, South Korea's largest feedmiller, Nonghyup Feed Inc., or NOFI, Wednesday (Apr 28) issued a tender to buy corn and feed wheat.

 

However, it did not award any volumes, citing high prices, trading executives said.

 

NOFI was seeking around 100,000 tonnes of US No. 3 corn and around 50,000 tonnes of feed wheat for delivery in late September and early October.

 

The lowest bid for corn was US$224.40/tonne, on a cost-and-freight basis, while the lowest wheat bid was around US$206.60/tonne, C&F, excluding charges for unloading at multiple ports.

 

"Importers are unable to come to terms with the rise in grains prices over the last three weeks," despite the most recent downswing, a Singapore-based grains analyst said. Since adequate supplies are still available, importers are going slow on their purchases, he added.

 

In one deal, buyers in South Korea locked in a panamax cargo of Argentine corn at a premium of 81 cents/bushel over the July CBOT contract, free on board, but some traders consider the price too high.

 

Argentina's soymeal sales to Asian destinations have slowed since the sharp rise in prices on CBOT three weeks ago.

 

"Many exporters were caught on the wrong side, having sold physical cargoes at lower prices but not having covered their requirements," said an executive at a global trading company. On April 9, Argentine soymeal was sold for June shipment to Southeast Asia at US$331 a tonne, C&F, he added.

 

June shipments are now available around US$381/tonne, C&F.

 

In just one week, July CBOT soymeal futures had risen by around 5% to US$295.50 a short tonne on April 22. July soymeal ended US$7.40 lower Tuesday at US$286.80 a short tonne.