Analysts expect strong physical buying for Asian grains

Aggressive Asian grain purchases over the past few days may continue if prices remain depressed, trading executives and analysts said Friday (Jun 11).

 

There have been several deals to import corn, wheat and soy last week, a Singapore-based commodities analyst said. The trend may spill over into this week as traders snap up cargoes to take advantage of the lower prices, he said.

 

Many in the market are actively scouting for cargoes in Japan, Taiwan and South Korea, traders said. "Feed wheat is now available in South Korea at prices below US$200 a tonne, and this has spurred buying," a Seoul-based trading executive said.

 

A few feed wheat transactions have also been made at prices below US$196/tonne on cost and freight basis, he said.

 

The Korea Feed Association bought three 55,000-tonne cargoes each of corn and feed wheat and two cargoes of soymeal, cost and freight, in several deals last week.

KFA purchased one feed wheat cargo at US$197.39/tonne for delivery by November 10 and the other two for US$198.39/tonne each, for delivery by October 25 and November 5.

 

It bought one corn cargo at US$214.74/tonne for delivery by October 15, and two cargoes for delivery by October 25 at US$214.50/tonne. It also purchased one soymeal cargo at US$356.80/tonne and the second at US$353.90/tonne, both for delivery by December 1.

 

Other active buyers include South Korea's Major Feedmill Group and Nonghyup Inc., and the Maize Industry Procurement Association and the Kaohsiung branch of the Breakfast Soy Procurement Association, both of Taiwan.

 

December corn futures on the Chicago Board of Trade closed six cents higher Thursday (Jun 10) at US$3.64 1/2 a bushel. Traders expect prices to fall below US$3.30/bushel this month ahead of the US harvest.

 

November soy ended 1 3/4 cents, or 0.2% lower Thursday at US$8.94 3/4/bushel. Traders expect prices to fall below US$8.50/bushel in the next month.

 

The South American soy harvest is complete and the crop this year is 39 million tonnes higher than in 2009, while ongoing US planting has also been good, likely weighing on prices this month, a Tokyo-based executive at a global trading company said.