January 30, 2012
Thailand feed mills buy Brazilian soymeal
For arrival between July and September, Thai feed mills purchased 180,000 tonnes of Brazilian soymeal this week and 60,000 tonnes of Australian feed wheat as Asian buyers locked supplies on expectations of higher prices.
Vietnam is likely to be in the market for feed grain cargoes for March and April delivery, while South Korea's largest feed maker Nonghyup Feed is seeking up to 250,000 tonnes of corn and 110,000 tonnes of feed wheat.
"Buyers are getting active as there is some concern that prices might go higher because of the drought in South America and talk of Russia curbing wheat exports," said one Singapore-based trader.
Thai animal feed mills, which typically buy Argentine soymeal in bulk orders, took Brazilian new-crop soymeal amid concerns over supplies from drought-stricken Argentina. The deal was signed around US$405 a tonne, including cost and freight, for shipment in July-September period, traders said.
"Normally, Thailand is Argentina's market but they took Brazilian as the situation in Argentina is unclear due to the drought," said a trader who participated in the tender.
US wheat slid on Friday as the market took a breather after six straight sessions of gains sparked by concerns over Black Sea supplies and enhanced risk appetite following a pledge by the US Federal Reserve to keep interest rates low.
Corn and soy also dipped, but both markets were on track for weekly gains on estimates of lower crop-yields in Brazil and Argentina as a result of the drought. Argentina's soy and corn harvests will be smaller this season than in the previous crop year, the Buenos Aires Grains Exchange said, underlining concerns that recent dry weather might crimp world food supplies.
In its first harvest estimates of the season, the exchange forecast soy production of 46.2 million tonnes versus 49.2 million in 2010/11. It projected a 2011/12 corn harvest of up to 22 million tonnes, down a touch from the 22.1 million tonnes registered by the exchange in the previous season, but far short of initial expectations for a record campaign.
The drought has also hit southern parts of Brazil which is also expected to see its soy production decline. Traders said Vietnam is likely to be in the market after it returns from the Lunar New Year break to seek soymeal, corn and feed wheat cargoes.
Vietnamese millers are expected to seek some 100,000 tonnes of soymeal for March and 200,000 tonnes for April. They are also likely to tap the Australian market for 50,000 tonnes of feed wheat for March shipment and 100,000 tonnes for April.
South Korea's Nonghyup Feed is seeking up to 250,000 tonnes of yellow corn and 110,000 tonnes of feed wheat for arrivals in May and June. The tenders will close later on Friday.
"Most likely it will be US corn which is competitive as compared with the South American corn," another trader said.
Asian grain buyers are closely watching US grain exports and cash prices. US corn export sales surged 37% to a three-month high last week to lead a rebound in grain exports that followed bearish USDA crop production and stocks forecasts.
South American weather, any move by Russia to cap grain exports and European debt crisis are some of the key issues which could influence grain prices next week.