Malaysia, RI to buy more Chinese corn

Malaysia, RI to buy more Chinese corn

SINGAPORE (Reuter): Malaysia is looking to buy up to 50,000 tons of Chinese corn while an Indonesian trade house may also be shopping around for another 50,000 tons of corn from either China or Argentina, traders said yesterday.

"The Malaysians are trying to buy 50,000 tons of corn and the Indonesians are also looking around for the same amount," a senior dealer for a U.S. commodity trading firm told Reuters.

"The Malaysians will concentrate on the Chinese stuff. I think the Indonesians will be looking at Chinese or Argentine corn," a trader for a European grain house added.

But one U.S. trader said Malaysian corn demand should be "no more than 20,000 to 40,000 tons."

Dealers said buyers were looking for a price in the low US$140s (a tonne C&F). The delivery date will be around mid-May. "Indonesian end-users are no longer interested in picking up any more corn, but I think some trading houses there plan to get some more corn," a trader said.

Chinese corn coming into Southeast Asia was seen by the trade at about $148-$150 a tonne C&F on a Panamax for April/May shipment while Argentine corn was priced at $144-$146 a tonne C&F for May/June shipment.

"The Argentine harvest would be in full swing at that point," a trader said.

U.S. corn coming into the region was being quoted by traders in Singapore a few dollars above Chinese-origin.

"U.S. corn is not really being considered at the moment," one grain trader said.

"Chinese corn sales are already over a million tons and they could eventually be something between 1.5 to 2.0 million tons," one grains analyst said. "Korea is the biggest buyer. Japan has taken a few cargoes. The rest of it has been bought by the Malaysians, the Philippines and Indonesia."

But the Chinese corn spigot may be turned off soon after the sharp overnight fall in futures prices on the Chicago Board of Trade (CBOT), traders said.

The May CBOT contract shed 11-1/4 U.S. cents to end at $2.94-1/2 a bushel.

"If the May contract goes back to $2.80 (a bushel), the Chinese may turn it off at that point," a dealer said.

Regional dealers said Malaysia and Indonesia have bought around 150,000 tons of corn each since the beginning of the year although most of the grain was purchased recently.

Of the amount bought by Indonesia, about 30,000-50,000 tons came from China while the rest is mostly U.S. corn. In Malaysia, the volume of corn acquired from China probably reached some 100,000 tons, the traders said.

"Malaysia and Indonesia are trying to lock up their forward supplies while the going is good," one dealer said.

Thailand remains sidelined in the corn market until the government's Commerce Ministry announces the guidelines on its zero-tariff corn import scheme.

But the Thais were reported to be in the market to buy some 30,000 tons of U.S. wheat for prompt April shipment while putting in inquiries for soybean prices, traders said.

The soymeal business remained in the doldrums even though the Indonesians have open positions for about 100,000 tons of imports for May/July while the Malaysians are in for one Handy-sized ship during the same period.

"The people are paralyzed," one trader said, adding though that buyers may have no choice and would have to secure their positions.

"Soymeal remains on the high side and everybody believes the price will eventually come off," another dealer said. "U.S. meal is just not competitive at the moment."

U.S. meal coming into Southeast Asia was quoted by the trade at around $343-$345 a tonne C&F on a Panamax for May/July shipment, up sharply from last week's quote of $333-$335 a tonne.