June 26, 2007

 

South Korea may buy US corn on lower prices

 

 

The fall of US corn prices has prompted importers from South Korea to buy the grains while purchase from Japan and Taiwan remain on the sidelines due to rising freight costs, traders said Monday (June 25).

 

After issuing series of bids for wheat and soy, Taiwanese importers are likely to be quiet this week

 

According to a Taiwanese trader, the Corn Industry Procurement Association is interested to purchase a corn cargo but decided to cancel after the rebound in freight prices.

 

A trader at an international grain house said the Korea Feed Association will try to purchase corn for October arrival this week through private negotiations or tenders if prices at the Chicago Board of Trade (CBOT) further drops.

 

The association has purchased only two cargoes of US corn for November arrival since it failed on April 17 to buy a total of 495,000 tonnes of corn for October and November.

 

Some Korean traders said corn import prices, including cost and freight, were still very high given near-record-breaking freight rates.

 

Corn futures on the CBOT fell almost 5 percent on Friday (June 22) due to crop-friendly rain in the US Midwest and forecasts for better crop weather.

 

In the soymeal market, South Korean importers are expected to cover their October-December requirement while Japanese soybean buyers are looking for opportunities to cover half of its August requirements. Japan's soybean purchase ranges from 240,000 to 250,000 tonnes each month, traders said. 

 

A trader at a Japanese trading company, however, said the volume may likely decrease due to high freight rates.

 

Activity among Japanese corn buyers remained slow, with about a quarter of the quarterly requirements yet to be covered.

 

Last week, Zen-Noh, Japan's No.1 feed maker, said it would raise July-September compound feed prices by 1,100 yen (US$8.90) a tonne on average, the fourth consecutive quarterly increase.

 

Zen-Noh, which accounts for 30 percent domestic livestock feed market share, said a weaker yen, rising freight rates and firmness in Chicago corn prices have boosted its procurement costs for the period.