Japanese and South Korean corn importers will seek shipments this week and towards the end of the month after seeing falls in US corn prices late last week.
Japanese feed makers were estimated to have completed nearly 60 percent of their quarterly requirements for the January-March period as of last week, covering about 1.8 million tonnes compared with the quarterly purchase amount of about 3.1 million. "Purchasing will pick up slowly this week," said a Japanese trader. "I'm watching how strongly they will buy next week.
The trader said buyers are looking to complete about 70-80 percent of their quarterly requirements by the end of the month, while they will look at fluctuations of freight rates and US corn premiums.
Corn futures at the Chicago Board of Trade surged on Wednesday to 10-year highs, helped by the huge demand for corn from the ethanol sector and outlooks for short feed grain supplies. But a downward correction began on Thursday, after a bullish crop report, and continued on Friday. "South Korean buyers are also looking for opportunities to purchase more corn, anticipating less cheap Chinese corn," said an official at a foreign trading house.
South Korean corn importers have snapped up Chinese corn at competitive prices but Beijing recently has asked exporters to slow sales as it is worried that domestic prices may soar in line with surging international prices. This has prompted Asian buyers to look for alternatives and India has recently struck its first corn export deal in many years.
"The prices of Indian corn look attractive. We're also checking whether Indian corn is available," said an official at a South Korean feed maker. India has sold about 150,000 tonnes of the grain to Indonesia, Malaysia and Sri Lanka, said traders.
In the Japanese soyabean market, activity was sluggish after domestic oilseed crushers mostly completed purchases for December, and focus was shifting to their purchase for January. Monthly soyabean purchases from crushers were about 243,000 tonnes on average this year, down more than 4 percent from last year, as demand shifted to rapeseed.
Japanese soyabean buyers have been generally slow in covering their requirements, holding their purchases until the last minute due to sluggish sales of soya oil and poor crushing margins. This trend has made traders cautious about buying more of the oilseed than they need for fear of being left with huge stocks. In South Korea, state-run Korea Agro-Fisheries Trade Corporation has issued tenders to buy 7,000 tonnes of non-genetically modified soyabean.