August 5, 2013

 

Thailand buys 110,000 tonnes of wheat for Oct-Nov 2013

 

Thailand's millers have purchased 110,000 tonnes of feed wheat for October-November shipments, while buyers in Vietnam have booked South American corn cargoes for December.

 

Indian grain exporters were active this week, selling some 40,000 tonnes of wheat to Bangladesh as global prices firmed, traders said.

 

Thai millers paid US$258-US$259/tonne, including cost and freight, for optional origin wheat. However, traders said that the cargoes will come from the Black Sea region.

 

"It will be completely Black Sea as you can't get cheaper prices for feed wheat from any other origin," said one Singapore-based trader who was aware of the deals.

 

Wheat buyers in Asia are looking to replace Indian and Australian cargoes in the lower-end feed grain market with cheaper supplies from the Black Sea which are returning to the region after a three-year absence.

 

Vietnamese grain importers bought South American corn for December shipment, taking close to 150,000 tonnes at around US$255-US$260/tonne, including cost and freight, in deals signed over the last few weeks.

 

Vietnam usually buys cargoes a month or two in advance. However, this year, the country has been making forward purchases as it takes advantage of lower global prices.

 

Global corn prices have fallen more than 40% since hitting a record high of US$8.43-3/4 a bushel in August last year when a devastating drought across the US grain belt curbed world supplies.

 

Asia buyers are also looking to buy corn from Ukraine which is offering attractive prices although no deals have been signed yet. Ukrainian corn is offered at around US$245/tonne, including cost and freight, compared to South American corn being sold at US$250/tonne for November-December shipments.

 

"Prices are attractive for Ukrainian corn but we have not seen any deals taking place," another Singapore trader said. "Some buyers might be looking for a bigger discount. There could some buying interest if the spread widens to US$15 a tonne."

 

In India, exporters are actively selling wheat to millers in Bangladesh. Around 40,000 tonnes of Indian wheat has been sold at US$282-US$290/tonne, free on rail. A trader in India says more deals are expected as there is good buying interest.

 

US wheat gained 0.6% on July 26, taking its gains for the week to 1.8%.

 

Wheat millers in Pakistan are looking to sign more deals for Russian wheat after taking 250,000 tonnes, which is likely to start arriving by the second week of August.

 

Authorities in Pakistan are under pressure from the industry and state governments to abolish a 5% withholding tax on wheat imports, which will bring down the cost of the imported grain. The cabinet's Economic Coordination Committee (ECC) is likely to bring up the issue in the coming days, traders said.

 

Pakistan is set to become a net wheat importer this year with purchases climbing to the highest in five years after delayed planting and reduced fertiliser use hit domestic output and drove up local prices.