Japanese oilseed crushers will probably be looking for US or Brazilian soyabeans this week to take advantage of lower premiums, while Taiwan corn buyers will remain quiet due to high stocks, traders said on Monday. US soyabean premium offers for August shipment to Japan were at about $2.1 a bushel over the August contract on the Chicago Board of Trade (CBOT) on a cost-and-freight basis, down from premiums of about $2.15 to $2.2 for July.
Buyers may be more interested in Brazilian soyabeans now that exporter, taking advantage of the recent weakness in the Brazilian currency against the US dollar, have cut premiums.
One trader estimated that so far this year Japanese importers had booked about 330,000 tonnes of Brazilian soyabeans. "The volume was much smaller than last year, because Japanese bought cheaper US soyabeans more aggressively," he said.
Last year Japanese imports of Brazilian soyabeans totalled 779,000 tonnes. This year imports may be as low as 500,000 tonnes unless Brazilian soya becomes much cheaper, the trader said. Taiwan crushers, however, are holding off purchases of soyabeans as they anticipate even lower prices ahead. "Once the future pricing situation becomes clearer, and if it becomes apparent that prices will fall further, our members will be more willing to decide when to buy again," an official from the Breakfast Soyabean Procurement Association said.
In the corn market, high stocks have built up due to overbuying at the low prices seen at the end of last year. That has depressed the market and will slow down buying with the onset of summer, traditionally the slow season for meat and therefore feed demand, traders said.
"Corn supply is very high, while the feed intake from poultry and hog sectors is slow," an official from the Members Feed Industry Group said.
Taiwan's corn stocks for the May-June period were estimated at around 390,000 tonnes versus forecast demand of 310,000 tonnes, the official said. "We should be able to balance out the situation by August," the MFIG official said.
Japanese corn importers will stay cautious about buying unless US suppliers assure them that their shipments to Japan are not tainted with an illegal strain of genetically modified corn, traders said.
Japan has found two US corn cargoes tainted with Bt-10, a modified corn strain made by Swiss agrochemical group Syngenta A.G. that is not approved for distribution.
Japanese importers were shocked that a second case of Bt-10 had been discovered within days of the first report, which came only a few weeks after Japan began inspections.
More discoveries of tainted cargoes are likely to come as Japan has stepped up its tests, traders said. "In the current situation, we are cautious about making additional purchases of US corn," one Japanese trader said.
Japanese buying of US corn has been slowing since Syngenta said in March that some of its corn seeds in the United States had been contaminated with Bt-10 from 2001 to 2004.