December 27, 2010

 

Malaysia, Indonesia eye March wheat

 

 

Indonesia is likely to be in the market for 100,000 tonnes of wheat for March shipment while Malaysia is to buy about 60,000-80,000 tonnes in early January.

 

India, which sold about 10,000 tonnes of soymeal to Vietnam in holiday-thinned trading last week, is likely to corner more deals on competitive offers, regional traders said.

 

"Most mills in Asia are covered until March, but Malaysia and Indonesia are still open for some cargoes," said one trader. "I think they are going to buy as soon as they come back because prices are going up."

 

US-origin dark northern spring (DNS) wheat with 13% protein content was quoted approximately at US$450/tonne, including cost and freight, in Asia last week, while the same variety with 13.5% protein level is being offered at US$470/tonne.

 

US soft white wheat is selling around US$365/tonne, with prices of all types of US wheat having increased US$15-US$20 in the last 10 days.

 

"Prices have risen in line with Chicago futures as supplies are likely to get tighter as we go into 2011," said another trader.

 

Australian prime wheat was quoted at US$420/tonne, up US$10-US$15 from two weeks ago, while there were no offers for high-protein Australian prime hard wheat which has been severely damaged by excessive rains on Australia's east coast.

 

"Australian hard wheat is rare but we are not getting any offers," he said. "The value should be around US$480 or US$500, per tonne."

 

US wheat futures have surged more than 20% this month because of excessive rains in Australia and dry weather in the US brought up concerns over supplies in 2011.

 

However, flash flooding and mudslides forecast for the holiday weekend over sugar-growing district of Queensland are likely to spare wheat producing regions.

 

This year's lingering wheat crop centred further south in New South Wales state, may be unaffected by the latest deluge, permitting more crops to dry out and get harvested in what forecasters are predicting will be a bumper crop of more than 26 million tonnes.

 

However, the crop quality is still in question as excessive rains have slashed the protein content.

 

In the animal feed business, India sold some 10,000 tonnes of soymeal to Vietnam in containers at around US$420-US$425/tonne, C&F and traders said more deals were likely in January.

 

"Indian meal is now very competitive compared with South American cargoes, we expect good business early next year," said the third trader. "We think Vietnam and Thailand will have bulk deals for Indian meal."

 

Traders said Indian soymeal was quoted approximately at US$420-US$425/tonne in containers and US$440-US$445 in bulk shipment, a gain of US$5 from two weeks ago. This compared with South American soymeal offered at about US$480 a tonne, a rise of approximately US$15.