South Korean corn importers are likely to continue to seek grain for arrival in December, while Japanese buying is expected to be slow after heavy purchases last week, traders said on Monday.
Buyers in South Korea, the world's second-largest corn importer, are eyeing more cargoes of corn this week, in anticipation of further gains in freight rates and an uptake in Chicago corn futures.
South Korean feed makers bought around 342,500 tonnes of corn last week. Spot charter rates for modern Panama tonnage's on the benchmark US Gulf-Japan route were estimated at $55 a tonne on Monday, steady from last week and up more than $10 from a month, supported by strong Chinese demand for raw materials.
"Corn futures at the CBOT (Chicago Board of Trade) fell on Friday ahead of the US Midwest harvest season, but further big corrections would be limited. Buyers will seek more corn for December arrival," said an official at a foreign trading house.
In the soyabean market, South Korea's CJ Corp and Korean Agro-Fisheries Trade Corp will buy US grain this week. Taiwan millers will seek almost 100,000 tonnes of US wheat this week for shipment in October and November, while the market awaits a possible tender by the island's main soyabean buying group, traders said.
"There is the Labour Day holiday in the United States on Monday, so buying activity will be quiet until on Wednesday," said a merchant at a major trading house. "The Kaohsiung Breakfast Soyabean Procurement Association (BSPA) hasn't tendered since failing a tender last month," the trader said.
"It's unclear when they will tender." The soyabean-buying group passed on tender for between 30,000 and 60,000 tonnes of beans in August due to pricing.
Japanese corn buying is expected to be slow this week after feed makers bought a large volume of US corn last week for October-December shipment, traders said on Monday.
A trader estimated that feed makers had bought roughly 400,000 tonnes of US corn late last week, bringing the total volume they bought for the fourth quarter to between 1.8 and 1.9 million tonnes.
Japanese feed makers are expected to buy an additional 1.2 million to 1.3 million tonnes of corn to meet their needs for the fourth quarter, with more buying likely to emerge when corn prices decline, he added. "I expect they will complete corn buying for the fourth quarter in late September or October," he said.
US corn premiums for October-December shipment to Japan were higher on Monday, around $2.05 a bushel on a cost-and-freight basis over the December contract on the CBOT, compared with premiums for July-September of around $1.85.
Japanese oilseed crushers have shifted their focus to US soyabeans for November shipment, after covering their requirements for October by the end of last week, traders said.
But crushers are unlikely to buy a large volume this week, as they wait for US soya premiums to fall to an acceptable level. US soyabean premiums for November shipment to Japan were offered on Monday at $2.2-$2.3 a bushel on a cost-and-freight basis over the November contract on the CBOT, little changed from a week. This level was about 20 percent higher than a month, reflecting recent gains in ocean shipping rates.
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