October 1, 2012
South Korea's NOFI purchases 63,000 tonnes of South American corn
In a direct deal with a European trading house, South Korea's Nonghyup Feed Inc. (NOFI) has purchased 63,000 tonnes of corn of South American origin.
European traders said Friday (Sep 28) that some 43,000 tonnes was purchased at the outright price of US$295.60 a tonne cost & freight (c&f).
A further 20,000 tonnes was purchased at a premium of US$38 c&f over the Chicago March 2013 corn contract. The corn was for early January 2013 shipment for arrival around February 20, 2013.
"The latest deal means South Korean buyers have purchased well over half a million tonnes of corn this week," one trader said. "They moved in quickly before prices moved up."
Reuters has reported a huge 834,000 tonnes of corn purchases this week by Korean buyers. Observers had expected more corn import demand to be generated as corn prices retreated from records hit this summer, making corn more attractive than feed wheat.
US corn futures touched an all-time high of US$8.49 a bushel in early August as drought ravaged US crops. But Chicago front-month December corn has fallen steadily in September, dropping as low as US$7.05 a bushel this week because of good progress made with US harvesting.
Corn prices then shot up by 4% in early Chicago trading on Friday (Sep 28) after the USDA stocks report said inventories were not as plentiful as analysts had thought.
"The Koreans seem to have read the market masterfully, rather better than many others, in anticipating that the USDA report would bring back market attention to the impact of the US drought," a trader added. "It has been rather a remarkable week in the Korean sector."
NOFI on Thursday (Sep 27) purchased 69,000 tonnes of corn in a tender to be sourced from the US or South America. On Monday (Sep 24) it purchased 65,000 tonnes of Brazilian corn while rejecting offers for feed wheat as too high.
Other corn purchases were reported this week by Korean buyers including the Feed Leaders' Committee, Major Feedmill Group and the Korea Feed Association, among others.
