Grain importers in Japan are likely to seek purchases of soyabean and corn this week, while South Korean imports will slow as much of buyers' needs have been covered.
Japanese traders are expected to consider buying their soyabean for August shipments either from the United States or Brazil. Japanese crushers often buy more Brazilian soyabeans around this time of the year because of the high average protein and oil content of the crop, which is better suited to meeting the protein requirements of domestic feed makers.
But the highs price of Brazilian soyabeans this year, due partly to the strength of the real against the US dollar, has dampened Japanese demand. A trader said the pace of buying by Japan was slow, as traders were reluctant to go long in the current market as the country was buying less soyabeans because of falling crushing volumes.
"Nobody wants to be left with extra soyabeans with no space to put him or her and no demand for oil production, both of which would disrupt oilseed crushing plans," he said. He said oilseed crushers were in the process of planning their production for the October-December quarter.
Japan's Farm Ministry said in late March that Japanese crushers needed 3.1 million tonnes of soyabeans for calendar year 2006. Soyabeans are used in Japan mostly to produce soya oil, with smaller amounts used to make tofu, soya sauce and other food products.
The meal produced from crushed soyabeans is usually used as livestock feed. In the corn market, Japanese feed makers have covered about 65 percent of their corn needs of about 3 million tonnes for the July-September quarter, with more purchases likely to take place this week.
A senior trader said corn buyers will want to cover the bulk of their needs for the third quarter by the end of June before the start of the pollination of the corn crop in the United States, the source of most of Japan's corn supply.
"Pollination will start in July which is when the market becomes volatile due to weather conditions," he said.
Weather conditions, such as rainfall, become a major issue affecting trading on the Chicago Board of Trade as the corn crop gets to pollination, starting in July. CBOT futures fell sharply in Asian trading on Monday due to expectations that beneficial rains are on the way in the United States. July corns were down 4 cents at $2.31-1/2, after closing higher on Friday on a short-covering bounce.
South Korean corn importers, however, are expected to take a rest after making heavy purchases for September arrival last week.
"Most of buyers have already covered corn for September arrival. They will slowly re-enter the market for October shipment after checking movements on the CBOT," a trader in Seoul said.
Last week, South Korean importers bought at least 550,000 tonnes of optional-origin corn for feed production and food.
For soyameal and soyabean, South Korean importers are likely to be quiet this week after covering much of their needs until October.
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