FOB Gulf corn and soya steady; holidays dampen demand

US FOB Gulf corn and soyabean basis offers were mostly steady on Thursday, with the Lunar New Year holidays in Asia keeping demand thin, dealers said.
There were expectations that the wide price differential in ocean freight between the US Gulf and Pacific Northwest would likely shift some demand for corn and soyabeans to the PNW.
Dealers said freight from the PNW to Asia was about $15 to $20 per tonne cheaper than from the US Gulf due to the shorter travel time. "Business should be going to the PNW," one dealer said. "The spreads are more than 50 cents a bushel."
Strong demand, especially from China, and a shortage of bulk cargo vessels have lit a fire under freight rates, which have more than doubled from a year ago, dealers said.
Dealers meanwhile said CIF soyabean basis values rose in late morning trade amid a slowdown in farmer selling and fresh demand. A shipper was bidding strongly for supplies, causing some players to briefly pull their offers, the dealers said.
Processors were also seeking supplies, with one interior crusher reportedly raising his soyabean bids by 8 cents a bushel this morning.
"He probably needs to buy some January beans, and the market seems to think there might be other crushers who are not as well covered as previously thought," a dealer said.
Dealers also said that farmers have slowed their sales of soyabeans, waiting for CBOT futures to head even higher.
The dealers said CIF soyabean basis values seemed to have turned the corner after recent steep declines, and that tight supplies would help to keep prices supported firmly.
"Farmers still have some beans on-farm, but I don't think it's much," one dealer said. Dealers speculated that farmers could have sold more than 80 percent of their soya crop.
Some dealers were expecting Friday's USDA export sales to be disappointing due to China switching shipment on 404,000 tonnes from the current marketing year to 2004/05.
Dealers said January FOB corn basis offers were weaker, with some exporters having available capacity to ship grain. "Some people have holes in their line-up," one dealer said.
There was talk that a Taiwanese company was in the market for 42,000 to 44,000 tonnes of US corn, but dealers were unable to confirm it, adding that Taiwan was on holiday.