Millers want corn over wheat
Asian grain buyers are again likely to turn to corn imports for animal feed because it is selling at a significant discount to wheat, trade participants said.
Some animal feed processors require at least some wheat but in making feed for poultry, for example, the clear price-based preference is for corn over wheat, said a Singapore-based executive with a global commodity trading company.
Traders said corn on a delivered basis is around $25-$40 a metric ton cheaper than wheat.
Indian wheat from government and private stocks is available for $335-$340/ton and $348-$350/ton, respectively, basis cost and freight, to East Asia.
Optional-origin corn, likely to be supplied from South America, Thursday traded below $310/ton, C&F, to South Korean ports, for arrival in early February.
South Korea's Major Feedmill Group has purchased two cargoes totaling 133,000 tons of optional-origin corn from CJ International and Hamburg-based commodity trading company Alfred C. Toepfer International, trading executives said.
MFG bought the two cargoes, one of 63,000 tons and the other of 70,000 tons, for arrival by Feb. 5 and Feb. 10, respectively, both at $307/ton, C&F--the lowest price any South Korean corn importer has paid in more than three months.
"It will be difficult to ship out the next crop of South American corn in January as the harvest will be just starting, so it has to be the old crop," another trader in Singapore said.
Even Indian corn, which traded around $318/ton, basis cost and freight, to Vietnam late last month is now offered below $310/ton for shipment in December.
It isn't about prices alone and even the availability of feed wheat is tight, an exporter in Melbourne said.
Australian Standard White wheat is now offered around $380-$390/ton, on a delivered basis in Southeast Asian countries, while Ukraine's corn is offered around $328/ton, C&F, for shipment in November.
There is hardly any feed-grade wheat available and exporters are mostly offering milling-grade grain, with buyers' choice to use it for any purpose, a trade executive in Jakarta said.
Separately, South Korea's largest animal feed miller, Nonghyup Feed Inc., or Nofi, Friday bought 30,000 tons of Indian soymeal at $609.80/ton, C&F, from Cargill for arrival in January, taking advantage of the sharp fall in prices this week.
Nofi is seeking up to 140,000 tons of corn and 70,000 tons of wheat in a separate tender, scheduled for Monday.
Write to Sameer C. Mohindru at firstname.lastname@example.org
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(END) Dow Jones Newswires
September 21, 2012 07:46 ET (11:46 GMT)