Grain importers in South Korea and Taiwan are likely to seek purchases of US corn this week, as they hurry to cover their needs ahead of expectations of suspended exports from China, traders said.
Japanese corn imports are expected to slow as much of importers' needs have been covered, while soya buyers are also expected to hold off as they wait for the price of Brazilian beans to fall, traders said.
"Some South Korean feed makers, expecting Chinese corn exports, have delayed buying corn. But because of China suspending corn exports, they have to hurry to cover May shipment with US corn," a trader in Seoul said.
China, the world's number three corn exporter last year, would suspend exports of the grain from March at least "for some time" due to high domestic prices, traders and industry sources said last month.
Chinese corn has been attractive to Asian buyers because of lower shipping costs. Last year, South Korea imported 5.8 million tonnes of Chinese corn, more than three times as much as it did in 2004.
The United States had been the top exporter of corn to South Korea prior to that.
"The crop situation of other large suppliers such as Argentina does not look good. For a while, we have to depend on US corn," said an official at Korea Feed Association.
Argentina has begun harvesting a corn crop estimated at between 13.8 million and 15.5 million tonnes, down from a record 20.5 million tonnes in the 2004/05 season due to drought and a decline in plantings.
Taiwan's Members Feed Industry Group (MFIG) will open a tender on Tuesday to buy between 56,000 and 60,000 tonnes of US corn, a group source said. Traders said Nonghyup Feed and Major feedmills Group are likely to seek one or two cargoes of US corn for late May shipment.
In the corn market, Japanese buying is expected to be modest this week as feed makers have already covered about two-thirds of their corn requirements for April-June shipments, traders said. Japanese feed makers need about 3 million tonnes of corn for each quarter and source more than 90 percent from the United States, the world's biggest corn exporter.
A trader said feed makers would likely step up corn buying in the second half of this month to fulfil their remaining needs for April-June. Japanese soyabean buying is expected to be slow this week as oilseed crushers are waiting for a dip in prices of Brazilian new crops for shipments from late March to April, traders said. Normally, Japanese oilseed crushers source much of their soyabeans from Brazil in the first quarter of the year, as new crop supplies from the world's second-largest soya exporter become available.
But this year, the Japanese have bought only one cargo of Brazilian soyabeans, or about 45,000 tonnes, for shipment from late February to March. Monthly soyabean requirements from Japanese crushers are estimated at about 257,000 tonnes on average.
Traders said Japanese buying interest was hit by high prices of Brazilian soyabeans, as farmers were reluctant to sell in the face of a higher Brazilian real against the US dollar.
Premiums for Brazilian soyabeans vary depending on ports of shipment, but they are all well above US soyabean premiums of about 170 cents over the Chicago Board of Trade May futures on a cost-and-freight basis for April shipment to Japan, he said.
"Unless Brazilian soyabeans become competitive, crushers will likely source the raw material from the United States for April shipment," a Japanese oilseed trader said. In other regular tendering, the Taiwan flourmill's Association will seek 80,240 tonnes of US wheat in a buy tender on Tuesday, an official said.
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