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SC Iowa | Here is a DJ newswire story that came out in the night. Last year, the export buyers were booking wheat at the expense of corn, and now they are avoiding wheat (to some degree), and maxing out corn in rations.....
Ray J
DJ Asia Feed Wheat Buying Slow on $60/Ton Premium to Corn
Sameer C. Mohindru - DJ - 2 hrs 41 mins ago
South Korea's Major Feedmill Group Thursday cancelled a tender to import up to 65,000 metric tons of feed wheat, citing prices above expectations, as offers received were at a premium of over $60 a metric ton to corn, trading executives said.
The lowest offer was made by Hamburg-based commodities trading company Alfred C. Toepfer International GmbH around $299.89/ton, basis cost and freight, for arrival by March 15, the executives said. Company officials couldn't be immediately reached for comment. However, MFG was seeking the cargo for arrival by Feb. 20, they said.
Quadra Commodities offered the cargo at $299.48/ton, C&F, but with an additional charge of $1.50/ton for unloading part of the cargo at a second port, taking the total offer price to $300.98/ton, C&F.
"We do need at least some minimum volume of wheat, as the entire requirement can't be substituted with corn," an official at a major corn importing company told Dow Jones. He said high prices have deterred importers from locking in deals.
Another major importer of feed grains, Japan, is also buying more corn and cutting down on use of feed wheat, traders in Tokyo said.
Japan cancelled two tenders to import up to a maximum of 120,000 tons each of feed wheat this month and Wednesday bought only 26,370 tons of the grain, said an official at the Ministry of Agriculture, Forestry and Fisheries.
South Korea is the world's third-largest importer of corn after Japan and Mexico, and annual animal feed grade corn imports range between 5.7 million and 6.5 million tons, depending on the prices. Annual feed wheat imports range between 1.5 million and 2.3 million tons.
South Korean feedmillers have already covered their corn demand for arrival by February. They have so far bought 10 cargoes for March arrival, eight cargoes for arrival in April and even started purchases for May arrival, according to deals tracked by Dow Jones. However, they are going slow on wheat purchases, hoping for a downward correction in prices.
India's federal government is offering its excess wheat stocks to exporters with private companies making the highest bids around $286/ton, free-on-board. But on a delivered basis, it will still be upward of $300/ton in East Asian countries.
A large volume of wheat is available, but it is mostly of the flour milling grade, while animal feed grade supply is tight, said an importer in Manila. The Philippines mostly sources its feed wheat from Australia but last month also bought at least one 45,000-ton cargo from Ukraine around $260/ton, C&F, for shipment this month, he said.
"We were lucky to have gotten a low price early last month," he said.
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How things change in a year...
