As wheat and corn cash prices rose last week on the back of strengthening US grain futures, Asian feed grain processors and flour millers slowed purchases, but Malaysia may be in the market to buy corn in coming days.

 

US and Australian physical wheat prices rose as the benchmark Chicago Board of Trade front-month contract <Wc1> added 9.5% in the last two trading sessions, regional traders said.

 

"The market has gone up quite a bit, people are waiting and watching before getting into contracts," said one trading manager with an international trading company in Singapore. "But if there is any dip from the current level there will be good buying interest."

 

Australian prime wheat is being offered at US$270 a tonne, including cost and freight (C&F), into Southeast Asia and Australia prime hard wheat is being quoted between US$285 and US$290 a tonne.

 

US soft red winter wheat is being quoted at US$280 a tonne and hard red winter wheat at US$295 a tonne, while high-protein dark northern spring wheat is at US$360 a tonne.

 

Traders said prices offered for the Black Sea-origin wheat were more or less steady as the crop's harvest gains momentum in Ukraine and Russia. Feed-quality wheat was quoted at around US$210-US$220 a tonne and milling wheat closer to US$240-US$245 a tonne.

 

"The Black Sea prices haven't gone up but there is a possibility that it may go up because of rainfall in Ukraine at the moment," said one trader who sells Australian and Black Sea cargoes into Asia.

 

Ukrainian farmers have brought in 911,500 tonnes of the 2010 grain harvest, including 846,000 tonnes of barley and 56,000 of wheat, as of July 1, APK-Inform agriculture news agency said on Friday (Jul 2).

 

The country, which is aggressively marketing feed wheat into Asia, traditionally starts its grain harvest in the second half of June.

 

Mills in Thailand and Vietnam have signed contracts to import Black Sea-origin feed wheat in one of the first new-crop bulk deals to Southeast Asia, a direct challenge to South American and US corn shipments.

 

Traders said corn prices also rose in Asia following a more than 12% jump in the futures market <Cc1> but the gains were capped by poor demand from feed mills.

 

"Corn has gone up by about US$5-US$10 (a tonne), but the rise is not as much as wheat because demand is low and if the prices rise, more people will substitute it with wheat," said one feed grains trader. Argentinean corn was quoted at US$235 a tonne C&F.

 

Still, Malaysia is likely to be in the market, seeking 60,000 tonnes of corn for October or November arrival, traders said.