Asian grain importers make rare forward buys on low prices: traders

Asian grain importers are locking in forward purchases as they take advantage of a sharp drop in grain prices, with some buyers booking shipments right up to the middle of next year in an unusual move, traders said on Wednesday. Thailand has recently bought 300,000 tonnes of feed wheat from the Black Sea region for shipment between January and April at around $208-$210 a tonne, including cost and freight, they added. Buyers in Indonesia have covered up to December for supplies of corn, soyameal and distiller's dried grains.
"Normally most buyers book a few months in advance but we have seen some importers block cargoes several months in advance," said a trader on the sidelines of an industry conference Siem Reap. "Grain prices are really cheap, probably buyers are thinking that they are not going to get anything lower than this." Benchmark US wheat prices, down more than 15 percent this year, are trading near $5 per bushel, not far from a two-month low of $4.84 reached earlier in August with ample supplies from top exporters the United States, Russia, Ukraine and France adding pressure on the market.
Soyabeans hit their lowest since March 2009 at $8.55 a bushel this week as widespread rains in the crop's crucial phase of development boosted expectations of a bumper US output. Fears about the faltering economy in China, the largest importer of the oilseed, also hurt prices. The lower prices are prompting importers to book shipments for next year, traders said, adding that some millers were also looking for delivery in June next year. "We have booked up to December and we are now looking at January and February shipments," said one Vietnamese trader who trades corn and soyameal.
Thailand is buying around 150,000 tonnes of feed wheat a month while the Philippines is taking close to 70,000 tonnes, traders said. Global agricultural supplies have risen for the past three years with bumper crops from Brazil, Argentina, Russia, Ukraine and France adding to US production.
Ukraine's grain exportable surplus could reach 40 million tonnes in the 2015/16 season, the Ukrainian Agrarian Association has said. The country exported a record 34.8 million tonnes in the 2014/15 season. Weaker currencies at top exporters are also making their supplies more competitive in the world market. The Russian rouble has lost nearly a quarter of its value against the US dollar this year, while the Brazilian real has slumped about 35 percent.