US FOB Gulf corn and soyabean basis offers held steady on Tuesday with few inquiries in the market place amid volatile futures prices and rising ocean freight rates, traders said. Wheat basis offers fell sharply, due to rallies in Chicago and Kansas City futures as part of a broad-based commodities rally that lifted grains, crude oil and precious metals.
Traders were skeptical about Iraq announcing it bought 50,000 tonnes of HRW wheat for $420 per tonne FOB. "I don't think they will ever see that 50,000 tonnes," said a US trader. "It's $20 below replacement and nobody is going to sell Iraq wheat at replacement prices."
Exporters normally charge Iraq a hefty risk premium due to the fact that negotiations are usually prolonged and wheat slow to ship. Corn export premiums held steady, although Argentine corn was becoming more competitive.
"The US is capturing most markets around the world," said a corn trader. "The Argentine premium did weaken but US is still capturing most of the destinations. The spread did narrow but we're not there yet."
Soyabean export premiums held steady but sales were slowing as buyers shifted to purchasing new-crop from South America. China was also buying soyaoil for May through July shipment from South America. "We're not competitive out of the US right now," said a vegetable oil trader.