July 3, 2007

 

Asia's grain buyers to seek more US corn; slows grain purchase on high freight costs

 

 

The US corn crop report data released Friday (June 29) are likely for Asian grain importers to seek corn with its falling prices. High grain import costs and freight rates however will discourage active purchases, traders said on Monday (July 2).

 

Corn futures at the Chicago Board of Trade (CBOT) fell 3 percent on June 29 to an eight-month low after the USDA pegged 2007 US corn plantings at 92.888 million acres, the largest in more than 60 years.

 

Spot voyage fixtures for modern panamax rates for the benchmark US Gulf to Asia route are at around US$80 per tonne, up from US$74 a week ago, shipping brokers said.

 

Japanese feed makers, however, remain reluctant on purchases for the October-December period despite the steep fall of US corn prices.

 

Japanese importers have completed their requirements for the July-September period, with some concerns on lower domestic meat and egg production resulting to a decline in feed demand.

 

Japanese livestock farmers have been under pressure from a rise in compound feed costs for the fourth straight quarter in a row in July-September.

 

A manager at a Japanese trading firm said some corn purchases may be made this week as a rally above US$4 a bushel for CBOT corn futures looks difficult after the USDA's huge US corn plantings number.

 

Japanese soybean importers were also hesitant to decide when to buy the remaining half of the requirements for August due to US' sharp cut in soybean acreage based on the USDA report, traders said.

 

Taiwan grain importers are seen to be quiet this week, with only one possible corn tender, as slower seasonal demand and high prices could sideline buyers.

 

The Taiwanese consumes lesser meat during summer as well as lesser feed for animal producers.

 

Corn futures were at 10-year highs during the spring planting season, leading to an almost 13 percent drop off in Taiwan corn imports in the first four months of the year, according to customs data.

 

Taiwan imported 1.52 million tonnes of US corn between January and April, according to the data.

 

Taiwan's Corn Industry Procurement Association is also seeking for a tender in corn but a company official denied the purchase rumour.