November 5, 2012
Thailand buys US wheat while Indonesia buys Australian wheat
As Asian importers covered supplies for next few months, Thai flour millers bought 45,000 tonnes of US wheat this week for shipment in December, while an Indonesian processor took some 20,000 tonnes of Australian prime wheat.
Australian wheat prices slid about US$10 a tonne in Southeast Asia this week, pressured by slowing demand from the region's top importers as the harvest gathers pace in the key grain producing states of Queensland and New South Wales.
"Australian wheat prices have weakened as there is not much demand which is driving down exports," said one trader with an international trading company in Singapore. "We are getting lower offers."
Thai millers paid US$370 a tonne, including cost and freight, for US white wheat, US$405 a tonne for hard red winter wheat and between US$420-425 a tonne for spring wheat. Australian prime wheat to Indonesia was sold below US$380 a tonne.
The early wheat harvest in Australia, the world's second-largest exporter, is showing lower protein scales and poor yields, analysts and traders said, heightening concerns over global grain supplies as shipments from top exporters dwindle.
Farmers are finding lower-than-expected protein scales in New South Wales and Queensland, the states responsible for producing top quality hard wheat, while a dry spring is resulting in a decline in yields across Western Australia.
Australia's prime wheat was quoted around US$375 a tonne this week in Asia, down about US$10 from last week. Australian standard wheat was being offered for around US$370 a tonne while Australian hard wheat was at US$385 a tonne.
US soft white wheat was quoted around US$370 a tonne, hard red winter wheat at around US$405 a tonne and spring wheat at US$420 a tonne.
In the corn market, Malaysia is yet to cover around 80,000 tonnes of December shipment, while Indonesia is looking for some 120,000 tonnes to be delivered before the end of the year, traders said.
"We expect corn buyers to get active as supplies are getting tighter for shipment between December and February," said one feed grain trader in Singapore.
Asian feed grain buyers will face higher costs as supplies from South America dwindle after relentless exports from the region since April, with drought curbing yields across the US grain belt.
The prices of South American cargoes being offered in Asia for January and February shipment have started inching closer to the US values, leaving the buyers with little choice but to pay more.
South Korea's Korea Corn Processing Industry Association purchased 55,000 tonnes of optional-origin corn for arrival by March 2013 at US$334.30 a tonne, C&F. The Korea Feed Association bought 63,000 tonnes of South American-origin corn in a tender for up to 252,000 tonnes. It paid US$327.93 a tonne.
Traders said the market is closely watching the tender floated by India's State Trading Corp to export 150,000 tonnes of wheat for shipment from December 10-January 15.
India has been selling wheat from the government's overflowing silos and it has given buyers the opportunity to replace expensive corn with some of the lower quality Indian wheat.