June 4, 2012


Thailand buys 40,000 tonnes South American soymeal



Even as most Asian buyers remained on the sidelines and expecting prices to decline further, Vietnamese grain processors bought 12,000 tonnes of Indian corn while Thai feed millers imported 40,000 tonnes of South American soymeal for August shipment.


South American soymeal was traded at around US$525-530 a tonne, including cost and freight (C&F), while Indian corn was sold between US$230-240 a tonne for shipment in June and July, traders said.


Asian grain importers are making hand-to-mouth purchases, hoping for lower prices with wheat from the Black Sea region likely to enter the market and estimates of near-record corn supplies from the US.


"Millers are waiting and watching as Black Sea wheat supply is expected in the next few months and everyone is looking at a big corn crop out of the US," said one Singapore-based trader.


Wheat and corn prices eased this week in Asia's cash market, tracking losses in the benchmark US futures. US soft white wheat was quoted around US$305 a tonne, C&F, while hard red winter wheat was being priced around US$320 a tonne. The spring wheat is being priced around US$375 a tonne. This compared with Australian prime wheat being offered around US$300 a tonne in Southeast Asia and Australian standard wheat at US$295 a tonne, traders said.


Chicago Board of Trade wheat has lost almost 6% this week and corn is down nearly 4%, with both falling for two consecutive weeks amid concerns over the euro zone debt crisis and slowing Chinese growth. Soys are also down 3.6% after losing 1.6% last week.


India aggressively sold corn into Southeast Asia in containers, even though there was not much demand for bulk shipments.


"For Malaysia and Indonesia corn supplies are coming from India, but it's mainly in containers," said another Singapore trader.


"India is active with Bihar crop coming into the market, which is much cheaper than the South American cargoes," he said, referring to supplies from the eastern Indian state.


South Korea's Korea Corn Processing Industry Association bought 60,000 tonnes of South American corn from Cargill Inc at US$262.72 per on a cost and freight basis. This compared to Indian corn being offered at around US$230-240 a tonne, C&F.


Lower global prices of corn, resulting from expectations of a rebound in global supplies later this year, are curbing demand for Australian feed wheat. Australian feed wheat is being offered at around US$280 a tonne in Southeast Asia, compared with corn being priced between US$230-260 a tonne, C&F, depending on the origin.


"It is possible to get Brazilian corn at US$255, so feed wheat has to be at least US$10-15 cheaper than that," the second trader said.


Asian millers will replace wheat with corn in animal feed for the first time in at least a year after benchmark wheat prices rallied to a nine-month high last week, dealing a blow to Australian wheat producers who have a record crop. Grain buyers are looking at the weather in the US Midwest next week before making purchase decisions.


Even as much-needed rain fell across the US Midwest on Thursday, farmers continued to worry that the recent high heat and dry weather across the nation's grain belt could sour yield prospects for corn.


Forecasts for much of the central and eastern Corn Belt promised only meagre rains of less than an inch, which would do little to curtail the spreading dry conditions.

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