May 7, 2012
Indonesia targets July wheat, South Korea buys corn
Last week a group of South Korean feed mills bought around 60,000 tonnes of corn for November arrival, while Indonesian flour mills are likely to be in the market to cover some 150,000 tonnes of wheat for July shipment.
Malaysia is seeking 60,000 tonnes of corn for June shipment as global prices fell this week on expectations of a record US crop to replenish tight global supplies. While most Asian importers have booked wheat cargoes for their requirements up to July, some millers in Indonesia were looking to cover supplies.
"For June and July most of the buyers are pretty much done, barring a few who will buy now as prices are attractive," said one Singapore-based trader with an international trading company. "For August, we expect demand from Thailand, Malaysia, Indonesia and Indonesia."
The benchmark US wheat has lost almost 5% this week, its biggest decline since February, while soys have given up 1%, the most in three and a half months. Corn is down 1.4%, falling for three out of four weeks. Even though US wheat prices fell, Australian values were largely unchanged, steady from last week on slow farmer selling.
Australia prime wheat was quoted at US$303 a tonne, including cost and freight (C&F), standard wheat was being offered around US$298 a tonne and prime hard wheat with 13% protein was being sold at close to US$295 a tonne. Australian farmers are busy planting their 2012-13 crop after two straight years of record-large production.
In the feed grain market, South American corn prices fell between US$5 and US$10 a tonne to around US$310 a tonne, C&F, for July shipment, tracking weakness in Chicago Board of Trade futures.
Malaysian feed millers, which have been postponing their purchases, are likely to be in the market for 60,000 tonnes of corn for June arrival.
"They will try to negotiate the prices down as everyone is bearish for corn next year, so it should also pressure old-crop prices," said another Singapore trader.
A group of South Korea millers bought 60,000 tonnes of corn for shipment in November at US$276 a tonne in a private deal as grain buyers snap up cargoes, traders said. South Korea's largest feed maker, Nonghyup Feed, this week bought 123,000 tonnes of corn for November shipment in tenders.
In the soy meal market, prices continued to climb in the face of tightening South American supplies. Argentine soymeal was quoted between US$520 and US$525 a tonne, C&F, up around $10-15 from last week.
The Buenos Aires Grains Exchange lowered its forecast of Argentina's 2011-12 soy harvest to 41 million tonnes, from its previous estimate of 43 million.
South Korean buyers are also seeking corn and soymeal via tenders which close later on Friday (May 4). The Korea Corn Processing Industry Association is in the market for 55,000 tonnes of corn to be delivered by September 10, while Nonghyup Feed is seeking 55,000 tonnes of soy meal for arrival by September 15.