June 8, 2012

 

Taiwan Flour Millers' Association buys 48,750 tonnes of US wheat

 

 

The Taiwan Flour Millers' Association (TFMA) obtained on Thursday (June 7) 48,750 tonnes of US wheat in three grades from Alfred C. Toepfer International GmbH. for delivery around July 14-28, trading executives said.

 

The TFMA purchased 23,850 tonnes of Dark Northern Spring wheat with 14.5% protein, 12,950 tonnes of Hard Red Winter wheat with 13% protein and 11,950 tonnes of Western White wheat with 9% protein at US$331.82, US$301.43 and US$255.80 a tonne, free-on-board, they said.

 

After adding the freight cost of US$27.88/tonne to the free-on-board cargo, the totals work out to US$359.70, US$329.31/tonne, and US$283.68, C&F, for the three grades.

 

The association's import prices for high-quality milling wheat are widely considered a benchmark in the Asian grain trade, even though it buys relatively small volumes.

 

FOB prices for Dark Northern Spring wheat have declined around US$1.54/tonne since May 10, when the association held its last tender, amid forecasts for a healthy US spring wheat crop from the current sowing season--to be harvested in September, analysts said.

 

FOB prices for Hard Red Winter wheat are a tad higher by US$1.29/tonne, as dry weather ahead of the ongoing winter wheat harvest is feared to have damaged the crop in some of the US regions, they said.

 

Since May 2, when the association last purchased Western White wheat, the grade's price is US$12.42/tonne or 4.6% lower in anticipation of higher overall US wheat output in the current marketing year that began June 1.

 

US wheat output is likely to recover substantially in 2012-13 on favorable weather.

 

The USDA has forecast a 12% rise on year in both US wheat output and exports to 61.1 million tonnes and 31.3 million tonnes in 2012-13. The forecast will be updated Tuesday.

 

The association also benefited from a decline in dry bulk transportation rates in the region. Freight costs have declined by 12% since the May 10 tender and 23% since April 19, when the association held a previous tender.