May 28, 2011

 

Pakistan sells wheat, Indonesia slows corn purchases

 

 

Pakistan sold some 25,000 tonnes of wheat to Malaysia and Indonesia this week on competitive prices, while Indonesia reduced its corn imports from India ahead of domestic crop arrival.

 

Pakistani wheat was traded at around US$310 a tonne into Asia, one of the most competitive origins for milling wheat, traders said, adding that most Asian buyers were on the sidelines this week following strong gains in global prices.

 

"Most buyers are more or less covered until August, so no one wants to step in to sign a deal when the market is so hot," said one executive with an international trading company in Singapore.

 

"Pakistan seems to be the only origin active, they are selling to Indonesia and Malaysia."

 

US spring wheat was quoted at US$525 a tonne, including cost and freight into Asia, a gain of around US$20-US$25 from a week ago, and soft white wheat was offered near US$385 a tonne, around US$10-U$15 higher.

 

Australian prime hard wheat was quoted above US$520 a tonne and Australian prime wheat near US$410 a tonne.

 

Chicago Board of Trade wheat has gained more than 5% in three straight sessions of gains, while gains in the high-protein US spring wheat have been stronger, with Minneapolis Grain Exchange rising 7% during the period.

 

Corn has added more than 2% as inclement weather threatens to shrink grain supplies.

 

Pakistan, which is aggressively marketing its cargoes, is expected to produce at least 25 million tonnes of wheat this year, leaving it with at least a couple of million tonnes to export with consumption estimated at around 22 million.

 

Japan's farm ministry bought 156,917 tonnes of milling wheat from the US, Canada, and Australia in a tender that closed on Thursday (May 26). The wheat is for loading in July.

 

Traders said India and Myanmar were making aggressive offers to compete in the Asian corn market, given the slow down in imports by Indonesia.

 

"Indian prices have come under pressure in the last 10 days because of slower imports by Indonesian millers who have lost interest in imported corn because of local supplies," said one Singapore-based trader who sells feed grains in Asia.

 

"Myanmar is trying to price its cargoes at very competitive levels."

 

Traders said Indian corn was quoted around US$305-US$310 a tonne C&F, after having dropped from a high of around US$350-US$355 a tonne at the end of April. Myanmar corn is around US$295 a tonne.

 

Taiwan's Maize Industry Procurement Association passed on a tender to buy 45,000 tonnes of corn from the US or South America.

 

Asian grain importers are tracking weather in the US, Europe, and China where crops have come under stress as adverse weather is threatening to curb supplies.

 

Severe storms moving through the central US again dumped heavy rains across the Corn Belt, sidelining farmers from planting corn and soybeans.

 

There are persistent concerns over a severe drought in northern Europe, mainly in top producer France, which would undermine the coming harvest.