South Korean feed makers are expected to seek corn and soyameal for July arrivals this week if offers meet their target prices, while some buying is also expected to emerge in Japan, Asian traders said on Monday. Feed makers in South Korea want to buy panamax-sized corn cargoes for July arrival at below $140 per tonne on a cost-and-freight basis, traders said.
For soyameal, they are seeking panamax-sized cargoes for arrival the same month at a price below $250 per tonne C&F, they said.
"Feed makers are aiming to receive Chinese corn, although they are buying corn of optional origins because other origins have no price competitiveness," a trader at a foreign supplier in Seoul said.
The Korea Feed Association (KFA) bought 52,500 tonnes of optional-origin corn for arrival on July 25 at the port of Inchon from Cargill in private talks last week.
The price for the deal was $139.80 per tonne on a C&F basis if sourced from China and $146.80 per tonne C&F if from the United States and South America. In the milling wheat markets, Korea FlourMills Co Ltd is considering buying US No 1 wheat for May arrival at the port of Mokpo this week, while other flour millers will stay sidelined, traders said.
For feed wheat, feed makers need to buy July arrival cargoes but they are expected to take their time before making the next purchase, traders said.
Japanese buyers have mostly completed purchases for April-loading soyabeans, and have started to look for May cargoes. For the May market, buying of US soyabeans has moved at a brisker pace than that of Brazilian soyabeans, although new crops from the South American country usually become available in world markets in large quantities from March.
Brazil is the world's No 2 soyabean supplier after the United States. One trader said the slower pace for Brazilian soyabeans was due to the high cost of transporting the commodity, which was making it less competitive compared to US products.
US traders said last week that low ocean freight is helping to draw demand for US soyabeans for shipment from the Pacific Northwest at a time when importers would typically turn to cheaper supplies in Brazil and Argentina.
They said even though soyabean prices were comparatively lower in Brazil and Argentina, their higher freight rates were helping to make Pacific Northwest shipments to Asia competitive. The Japanese trader said, however, that the difference in freight rates was beginning to show signs of narrowing.
Japanese buyers were expected to actively seek soyabean cargoes this week, but with one eye keeping careful track on freight rates.
Elsewhere, Japanese corn buying is expected to be slow. Corn purchases for the April-June market were about 90 percent completed. Japan typically buys about 4.0 million tonnes each quarter. "The remaining purchases are mostly adjustments to fill in remaining requirements, and could take place this week or next," one Japanese trader said.
Japanese buyers are believed to have purchased some cargoes of Chinese corn, which became more competitive due to lower prices and freight rates. However, the overwhelming bulk of corn continues to be purchased from its main supplier, the United States.