April 10, 2010

 

 

Asian corn prices may get slight support over the next few days due to strong buying interest by South Korea and Vietnam in the physical market, according to trading executives.

 

Overall, fundamentals are weak due to ample supply in the US and South America, but the latest scramble by Asian buyers to book cargoes may at least prevent a further fall in prices, an analyst in Singapore said.

 

A state-run Chinese trading company has taken long positions in corn futures on the Chicago Board of Trade, which is also supportive for prices.

 

South Korea has purchased close to 500,000 tonnes of US corn in the last two weeks, mostly for August and September shipment, at prices between US$217/tonne and US$225/tonne, on cost and freight basis. South Korea's corn buying is likely to gather momentum as several companies plan to again come out with tenders to buy large Panamax-sized parcels of more than 50,000 tonnes each.

 

Plans by Chinese state-run and private companies to import up to one million tonnes of corn are also in the pipeline but will hinge on the government granting them licenses.

 

Japan, the world's largest corn importer, has started looking for corn for July/August/September shipment, having covered a large part of its requirements for the current quarter.

 

Taking advantage of the recent decline in prices, Malaysia has booked a cargo of 65,000 tonnes of Argentine corn at US$222/tonne, cost and freight, for shipment between June 15 and July 15. Vietnam is also buying South American corn and has contracted deals at prices close to US$240/tonne, cost and freight. It is also buying Indian corn in containers.

 

The CBOT May corn futures contract ended 8 1/4 cents lower Thursday (Apr 8) at US$3.48 1/4 per bushel and is hovering around its lowest level this year.