Some South Korean flour millers and Japanese oilseed crushers may buy this week, while many corn importers were likely to stay sidelined while they waited for prices to fall, traders said on Monday.
East Asian corn importers had also covered their needs through arrivals in September or October, traders said. "We plan to issue joint tenders if prices fall from the current levels in overnight trading in the US," a Seoul trader at Donegal flourmill's Co Ltd said.
Japanese oilseed crushers will seek US or Brazilian soyabeans for August shipment this week. One trader said some crushers might skip US soyabean purchases for August shipment, as US soyabeans were more expensive than Brazilian beans.
So far Japanese importers have agreed to buy nine to 10 cargoes of new-crop Brazilian beans for March-August shipment this year, which is estimated at less than 450,000 tonnes.
The trader said Japanese could buy five more cargoes or about 250,000 tonnes of Brazilian soyabeans for August-September shipment, if Brazilian beans remained price-competitive against US crops.
In the corn market, Korean importers were taking a wait-and-see attitude because they saw prices falling, traders said. Last on Friday, the Korea Corn Processing Industry Association (KOCOPIA) bought up to 55,000 tonnes of non-genetically modified corn at $157.89 per tonne C&F for US or South American origins, and at $147.89 per tonne C&F for Chinese origins.
These deal prices of corn at food grade were much lower than those for feed signed early last week. The Major Feedmills Group (MFG) bought 105,000 tonnes of optional origin corn last on Wednesday at $160.90 per tonne C&F for South American origins or US and at $150.90 per tonne C&F for Chinese origins.
Japanese corn buyers were also likely to stay quiet as they had almost finished covering needs for July-September shipment, and it was start purchases for the fourth quarter, traders said.
Feed makers had already covered about 90 percent or 2.7 million tonnes of their corn needs for third-quarter shipment, which is estimated at roughly three million tonnes, they said.
Feed makers would likely buy the remaining 300,000 tonnes by the end of this month or July, but a weaker tendency in Chicago corn prices and freight rates may encourage some of the companies to wait for several more weeks, they said.
As for October-December shipment, feed makers were expected to start purchases in July at the another trader said. He cited smaller-than-normal shipments in domestic compound feed as another reason for slow corn buying by Japanese.
Prices of chicken and eggs in the Japanese market have been weak, due partly to the outbreak of bird flu in Japan this year. Low prices have encouraged Japanese livestock farmers to cut output, leading to smaller consumption of feed, he said.