December 15, 2003



Little Activity Expected From Japanese Grain Importers with Short-Term Goals Met


Japanese importers of soybean and corn are expected to keep a low profile this week since their near-term requirements are mostly met, industry sources said today.


Traders said Japan had completed the bulk of its corn buying for January-March 2004, although a few traders could place additional orders due to low domestic stocks.


They attributed the low stock levels to firm domestic livestock feed prices.


"We could see some late buying emerge...but I don't anticipate this to be more than 100,000 to 200,000 tons," one Japanese trader with a trading firm said.


Another estimated that the additional buying could reach as high as 300,000 tons, although he said the figure was hard to pin down.


Japan imports 16 million tons of corn per year for production of food and animal feed.


Traders said importers were likely to keep a low profile, as most were unlikely to begin seeking cargoes for the second quarter of next year at this point.


Traders are closely watching out for any developments on China's policy on corn exports.


Increasing signs that China would suspend corn exports from January at least for a few months has set the market buzzing with talk of cancellations or defaults.


Traders said Japan's imports from China, the world's second biggest corn exporter this year, were usually about 100,000 tons a month.


In the oilseed market, Japanese importers said buying for February shipment had virtually been completed.


Japan typically buys 400,000 tons of soybeans each month for crushing and food.


Some traders said a few importers could begin tapping the market for March cargoes with an eye on prices on the Chicago Board of Trade (CBOT) and freight rates.


Freight rates are higher in the forward months, so it is a question of whether a trader decides it is better to cover needs now or wait until end of January, which is the latest date to make purchases for March shipment, one trader said.

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