September 2, 2013

 

 

Amid concerns over rising global prices, Thailand's feed millers have bought about 200,000 tonnes of South American soymeal this week, due for arrival between November 2013 and February 2014.

 

Wheat importers were also active in Asia with 100,000 tonnes of US wheat sold to Thailand and 40,000 tonnes of Canadian spring wheat bought by Malaysian flour millers in recent deals, traders said.

 

"We expect more deals in the coming weeks as millers in Southeast Asia are negotiating deals," said one Singapore-based trader, who was aware of the Thai soymeal deal.

 

Three cargoes of Argentine soymeal of 50,000 tonne each were sold to Thailand at around US$80 above the Chicago Board of Trade futures for November-January arrivals, while another shipment of Brazilian soymeal was traded for February delivery.

 

US soymeal futures have climbed 1.2% this week, rising for a fourth straight week as hot and dry weather threatens soy yields in parts of the US crop belt. The product, used in making animal feed, has gained more than 16% in August, its biggest monthly gain in more than a year.

 

New-crop November soy rose to an 11-month high earlier this week while corn climbed to a five-week peak.

 

US corn and soy were planted late this season due to excessively wet spring weather, leaving each crop well behind normal maturity pace and exposed to harsh weather in August.

 

There are more concerns about yields as abnormally dry conditions and pockets of moderate drought have spread over parts of the US Midwest in the past week, including in the key crop state of Iowa.

 

The US Drought Monitor, issued weekly by state and federal climate experts, said more than 60% of Iowa was suffering from moderate drought, up from 35% a week earlier.

 

"Buyers are closely looking at Indian meal and right now, prices are very competitive," said a second trader in Singapore, who sells feed grains in Asia.

 

Indian soymeal is being quoted at around US$525/tonne, including cost and freight (C&F), for December shipment, which traders said was at least US$30/tonne less than offers from rival Argentina.

 

In the corn market, South Korea's largest feed maker, Nonghyup Feed Inc, purchased 60,000 tonnes of the grain in a tender that closed on August 28. The corn can be sourced from worldwide origins including the US, South America, the Black Sea region and South Africa.

 

Malaysia bought Canadian spring wheat with 13.8% protein content at around US$310/tonne C&F, while Thai flour millers have booked US soft white, hard red and spring varieties of wheat for shipment in November and December.

 

Most Asian wheat buyers are covered for a bulk of their needs up to December and are likely to seek January-March shipments in the coming weeks. Wheat prices have also edged higher on expectations of strong demand and weather concerns in Argentina.