Asian wheat buyers are likely to boost purchases to cover supplies for September and October after a slowdown in buying since June on volatile prices, traders said on Wednesday. Indonesia is expected to buy 150,000 tonnes for September, and 200,000 tonnes for October delivery, while Thailand is likely to take around 100,000 tonnes for arrival in September and October, traders told Reuters at a grains industry conference in Melbourne.
"Most buyers are covered up to August but they will be open for some September shipments and for October to December the coverage is very little," said one trader who sells US and Australian wheat to Asia. "There is strong buying interest which has emerged in the last week or so," said another trader. "They were caught on the wrong side as everyone thought there would be a further decline in wheat prices after a 25 percent fall in June. But prices have gone up now."
Wheat for September delivery on the Chicago Board of Trade edged up 0.2 percent to $6.95-1/4 per bushel on Wednesday. US wheat futures have risen nearly 19 percent this month, after sliding 25 percent in June on the return of cheaper Black Sea supplies to the market, coupled with concerns over the US economy and the exit of hedge funds.
Although global wheat supplies are plentiful after Russian exports resumed, the market has been supported by concerns over the US spring wheat crop, dryness in eastern Australia and prospects of greater use of wheat in animal feed. The Philippines, which usually buys US wheat, needs to cover some 120,000 tonnes for October and November.
Traders said there could be more purchases of Black Sea wheat after a Thai flour mill bought Russian wheat at $290 per tonne, including cost and freight, for shipment in August. Russia is aggressively marketing its cargoes, at prices some $20 to $50 a tonne below its rivals. Egypt, the world's largest wheat importer, has bought 360,000 tonnes of Russian wheat in two tenders this month.
Russia expects to reprise its role as a leading grain exporter this season, thanks to a good harvest after last year's severe drought forced it to impose an export embargo. It aims to export 16 million tonnes of wheat in the 2011/12 crop year, above the US agriculture department's projection for 12 million tonnes.
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