Thailand, Indonesia seen buying soybeans

Thailand, Indonesia seen buying soybeans

SINGAPORE (Reuter): Thailand and Indonesia are close to clinching a deal to buy 63,000 tons of soybeans from South America or India, Singapore traders said yesterday.

But two-month old reports that China will export 1.0 to 1.5 million tons of corn was written off by dealers here and the grain market here is now focusing on demand for the last quarter from countries in the region, the traders said.

"It's imminent," a trader in a European commodity house said when asked about the soybean purchase by Indonesia and Thailand. "They're in the market for the 63,000 tons of soybeans and they should close it soon," another trader said.

Traders said both countries were looking for soybean prices around US$5-$15 lower than those currently quoted for Chicago Board of Trade (CBOT) futures.

The CBOT July soybean contract closed2-3/4 U.S. cents down on Tuesday at $7.75 a bushel.

Indonesia is seeking 30,000 tons of soybeans for September/October shipment while Thailand wants 33,000 tons for October delivery, the traders said.

With China taking heavy deliveries of U.S. soybeans and soymeal, the two countries will probably buy soybeans from Argentina, Brazil and smaller parcels from India, they added.

Otherwise, the grain and oilseeds market in southeast Asia was quiet.

"Aside from Indonesia and Thailand trying to get their hands on soybeans, everything else is routine," one trader said.

But China said the sales to its two neighbors were exceptional and Singapore-based grain traders said last week Beijing had finally rejected proposals to lift the ban.

"It's a dead issue. I think the government there basically said no," one trader in a commodity house said.

"I don't think it's ever going to get off. We've stopped thinking about it," another trader said.

The focus of the market has shifted to the weather in key- grain growing areas in the United States, China and India, traders said.

Adequate rainfall in the U.S. would help ease pressure on wheat and corn prices later this year. Any shortfall in monsoon rains in India or China may force them to buy heavily in the grains market, driving prices up, the dealers said.

"This would put a lot of pressure on cash-strapped nations when they come in to buy their grain needs in the last three months of the year," a dealer said.

India's southwest monsoon looks to be adequate while reports have reached traders of less than optimal rainfall in China.

"If the rains are not enough, this may affect China's corn and soybean crop. The eastern corn belt in the United States also got off to a bad start. That's what the market is focused on so everybody's on a wait-and-see mode for now. If the weather does not improve, it may trigger panic-buying in the market," a trader said.