August 18, 2003
Asia Corn Outlook: Corn Mixed; Some Buyers Take It Easy
Corn prices in Asia will be mixed this week as Taiwan slows down buying on sufficient stocks while Japan takes it easy in the summer holiday season, trade participants said Monday.
Light demand will come from South Korea, but suppliers may not be willing to meet buyers' price ideas, participants added.
After buying one cargo last week, Taiwan feed companies will take a breather this week, as domestic corn stocks appear to be more than sufficient, said participants.
"A few suppliers were even asked to delay shipments, because the buyers didn't need the corn so urgently," said one trader with a global supplier.
Last week, Taiwan's Members Feed Industry Group agreed to buy 54,000 metric tons of U.S. corn for October shipment. Of the total amount, MFIG agreed to buy 48,780 tons at a premium of 107.76 U.S. cents a bushel to the Chicago Board of Trade's December corn contract, cost and freight, while the remaining 5,220 tons were purchased at US$132.58 a ton, C&F.
Japanese companies have finished covering around 75% of October-shipment needs and will take some time getting back into the market following the summer, a trader in Tokyo said.
Although interest is seen in South Korea for November-December shipments of corn, buyers are asking for low prices which some suppliers are unwilling to meet.
"We aren't interested in selling at US$114-US$115, C&F. We don't want to lose money," said a Singapore-based grains trader with a global commodities firm, referring to prices of Chinese corn.
"Basically, there are people who think US$115/ton, (free on board), can't hold. But we think it can," said the trader in Singapore.
Chinese corn for feed use is currently offered at US$115/ton or lower, FOB, for October shipment. But recent Chinese deals to South Korea have taken place at US$110/ton, FOB, or even lower.
Traders said recent gains in U.S. corn prices give no reason for Chinese suppliers to want to lower their own prices.
October-shipment U.S. corn offers Monday were around US$135/ton, C&F to South Korea, and US$140-US$150/ton, C&F Japan.
In other news, traders said earlier Monday that corn exports from China, the world's second largest producer after the U.S., continued their brisk pace in July, bringing total overseas sales in the first seven months of 2003 to 8.14 million tons, up 80% from exports in the same period last year. In July, China's corn exports were pegged at 1.45 million tons, a trader from China National Cereals, Oils & Foodstuffs Import & Export Corp. in Beijing said.
Elsewhere, Philippine President Gloria Macapagal Arroyo has approved the immediate importing of 150,000 tons of corn to ease the supply shortage caused by the recent Typhoon Imbudo.