April 30, 2011

 

Malaysia seeks South American corn

 

 

Malaysian feed processors have plans to purchase about 60,000 tonnes of South American corn for August shipment.

 

Pakistan, on the other hand, was aggressively marketing wheat into Southeast Asia this week at competitive prices.

 

Australian wheat exports have slowed down to a trickle as a stronger currency has made cargoes from the world's fourth largest exporter uncompetitive, regional traders said.

 

Animal feed producers in Malaysia are in the market to book a panamax cargo of corn, but a deal is yet to be signed with the volatility in global grain markets acting as a deterrent.

 

"Malaysia is inquiring, but the price is not workable," said one trader who sells feed grains in Asia. "They are looking for August and September but its difficult to the fix price because of planting delays in the US."

 

Corn from Argentina is being quoted around US$375 a tonne, including cost and freight (C&F), little changed from last week, but buyers are expecting values to fall following a steep decline in the benchmark US prices.

 

CBOT actively traded July delivery corn fell by its daily limit of US$0.30 on Thursday (Apr 28) amid the biggest fund liquidation this year as a resumption in planting in western stretches of the US Corn Belt alleviated concerns about supply.

 

"Buyers are expecting prices to fall not just for corn, but also wheat because the futures market has been hit hard," said another Singapore grains trader.

 

The wheat market has been hammered this week with a decline of nearly 8%, biggest loss in seven weeks on better weather in the US and prospects of higher exports from the drought-hit Black Sea region.

 

Still, wheat offers from Australia remained at higher levels as a result of the strengthening Australian dollar.

 

Australian feed wheat rose to US$335-$340 a tonne C&F, a gain of around US$10 from last week, while Pakistan sold milling wheat around US$320 to US$325 a tonne.

 

"We heard around 30,000 tonnes of Pakistani wheat was traded in Southeast Asia as it is cheaper than Australian wheat and it has higher protein content."

 

Protein levels in Australian feed wheat could go below 10%, while Pakistani wheat has some 11-12% protein level, traders said.

 

The Australian dollar consolidated near recent highs against a broadly weaker US currency on Friday and within spitting distance a huge chart objective at US$1.1000, having enjoyed its best month so far this year.

 

The Aussie paused at US$1.0900 after a run of new 29-year highs struck this week, having gained an impressive 5.6% in April.

 

Australia prime wheat was quoted at US$410 a tonne, C&F, to Asia this week and Australian prime hard wheat was being offered near US$500 a tonne.

 

US hard red winter wheat is priced close to US$450 a tonne, soft white wheat near US$390 a tonne and dark northern spring wheat at US$470 a tonne. All values include cost and freight.