October 2, 2012

 

 

Due to strong cash market demand and a rebound in futures, Asian grain prices will likely increase in the next few weeks.

 

Many investors liquidated longs on CBOT ahead of accounts' closing for the third quarter but fresh buying is now expected as fundamentals are still strong, an exporter in Melbourne said.

 

Near-month wheat, corn and soy futures on the Chicago Board of Trade are now around US$8.9 a bushel, US$7.57 and US$15.83, respectively. The near-month soy futures contract on the Chicago Board of Trade, which hit a record US$17.9475 September 4, has since fallen sharply.

 

Corn has fallen to below US$7.60 from a record US$8.4375 on August 10, while wheat is down from a multi-year high of US$9.4725 reached on July 23. The sharp fall in corn prices is one of the main reasons wheat prices have also fallen, a Singapore-based executive for a global commodity trader said. Many buyers of animal feed are now turning to corn, he added.

 

Optional origin corn for January shipment is now offered around US$295-300/tonne, basis cost and freight (C&F) at East Asian ports, trading executives said. Corresponding offers for feed wheat are close to US$335/tonne, C&F.

 

Trading companies are now offering to buy Indian wheat from government stocks around US$307-309/tonne, free on board. India has sold a 20,000-tonne cargo of wheat to a private buyer in Bangladesh around US$321/tonne, FOB for shipment in October, trading executives said. Wheat purchased by a commodity trading company from Indian government stocks will be supplied in the deal.

 

Bangladesh has bought a 50,000-tonne cargo of optional origin wheat from Daewoo International Corp. (047050.SE) at around US$353/tonne, basis cost, insurance and freight, liner out, a Dhaka-based government official said.

 

However, traders cautioned that recent grain purchases by Taiwan, Japan and South Korea will again push up prices later this week. These countries together bought more than one million tonnes of wheat, corn and soy last month.

 

South Korea's feed millers Nonghyup Feed Inc., or Nofi, and Major Feedmill Group Thursday (Sep 27) bought four cargoes totalling 266,500 tonnes of South American and optional origin corn, basis cost and freight, trading executives said.

 

Nofi bought a 69,000-tonne cargo around US$299/tonne from Cargill for arrival by December 20.

 

MFG bought three cargos--of 62,500 tonnes, 70,000 tonnes and 65,000 tonnes--from Peter Cremer, Concordia and STX Corp. around US$301/tonne, US$302/tonne and US$304.50/tonne, respectively, for arrival by February 25, February 20 and March 5, they said.