RI buys 400,000 tons of corn, say traders

RI buys 400,000 tons of corn, say traders

SINGAPORE (Reuter): Indonesia is believed to have bought close to 400,000 tons of corn after drought linked to the El Nino weather pattern blighted the crop on Java, traders said yesterday.

"The Indonesians must have bought that, minimum," a senior dealer for a trading house told Reuters. "They did some outstanding business with Argentina. The rest of the corn came from China."

"They needed another 400,000 tons because there is no rain on Java. Most of the corn will come from China," another dealer said. Indonesian feedmills were taking Chinese grain because they were at a strong discount to U.S. origins, he added.

Chinese corn coming into Southeast Asia was quoted by the trade at around US$135-$139 a ton C&F for October/December shipment on a Handy. The Chinese corn can also be delivered to smaller ports.

U.S. corn was seen at $143-$146 a ton C&F for the same period on a Panamax, dealers said.

One trader said he heard Chinese corn fetching a quote of as low as $132 a ton.

"Buyers in this region like those in Indonesia will not wait for the USDA crop report tomorrow and will pick up corn because prices are very attractive," a trader said.

The U.S. Department of Agriculture (USDA) monthly crop report is due out at around 1230 GMT yesterday.

Traders said the Indonesian corn crop was in poor shape.

"In a word, it looks very bad. They were hoping for rain, but nothing came. They're still waiting for rain to come," one said.

The drought was linked to the El Nino, a weather anomaly caused by formation of abnormally warm water off South America which turns world weather patterns upside down.