March 11, 2013

 

Indonesia buys 25,000 tonnes of Australian wheat for May 2013 imports

 

 

Indonesia has acquired 25,000 tonnes of Australian wheat for May 2013 imports as world prices continue to drop this week, due to improving weather across the US grain belt and other producing regions, and, thus, better supply prospects.

 

Indian soymeal prices jumped this week on strong demand from Iran which now accounts for the bulk of the country's exports of the animal feed ingredient.

 

Indonesia paid around US$350 a tonne, including cost and freight (C&F), for Australian standard wheat to be shipped in May, said traders, adding that Thai flour millers are likely to be in the market for May arrival wheat.

 

"Prices have fallen but we haven't seen a big pick up in Asian demand," said one Singapore-based trader who sells US and Australian wheat in Asia. "Indonesia bought one cargo and we expect Thailand to cover for May shipment."

 

The Chicago Board of Trade said that wheat is heading for a 3.5% loss this week, its seventh straight week of declines on improved supply prospects in the US.

 

Winter wheat growers in the US Plains were enjoying improved soil-moisture conditions in some key growing areas as the region's drought levels continued to retreat.

 

Australia, the world's second-largest wheat exporter after the US, forecast that production in the 2013/14 marketing year will rise 13% from the previous year, boosted by increased planting and higher yields from better growing conditions.

 

As a result, Australian wheat prices have slipped.

 

Australian prime wheat was quoted at US$355 a tonne, down from last week's US$365 a tonne and standard wheat was being offered around US$350 a tonne, compared with US$355-US$360 quoted last week. Australian hard wheat was quoted at US$365 a tonne, down from US$380 a tonne.

 

US wheat prices in Asia's physical market were largely unchanged despite Chicago futures losing more ground, traders said.

 

"There was a lack of selling in the US as some people have started feeling that the wheat market has been oversold," a second Singapore-based wheat trader said.

 

US soft white wheat was quoted around US$355-US$360 a tonne, to Southeast Asia while hard red winter wheat was being offered at US$370 a tonne. US dark northern spring wheat was offered around US$400 a tonne.

 

Indian soymeal is being quoted around US$590-US$600 a tonne, to Southeast Asia, an increase of about US$15 from last week. This compares with Argentine high-protein meal being offered around US$525 a tonne for April-May shipment.

 

Traders said that the bulk of Indian soymeal was destined for Iran, whose demand had resulted in the prices firming.

 

Asian buyers are looking forward to a rebound in soy supplies from South America although port congestion in Brazil is causing concerns.

 

Analysts expect the USDA to lower its forecasts for end-year 2012/13 of US and global soy stocks. It is expected to increase supply estimates for wheat and corn.