20000314

Japan grain: Users completing Q2 corn purchases

TOKYO: Japanese buyers are set to finish covering their corn needs for April-June shipment, after having purchased around 500,000 tonnes of corn last week, driven by fears about further gains in grain vessel rates, traders said.

Japanese are believed to have purchased 3.5 million tonnes, and will likely buy an additional 500,000-600,000 tonnes, they said.

"We can say the corn purchasing programme for April-June shipment is almost over, as buyers have covered nearly 90 percent of their corn needs for the period," said an official at a grain trade house. "They will decide how much more to buy for the term, depending on actual feed demand at home."

Domestic demand for compound feed might be dented slightly by expected surges in feed selling prices for the April-June quarter, traders said.

Japan's National Federation of Agricultural Cooperative Associations (Zen-noh) is expected to raise the average selling price of compound feed for the second quarter by around 2,000 yen per tonne, in line with the movements in the Chicago futures prices and dollar/yen exchange rates during the current quarter.

Japanese feed suppliers use Zen-noh's compound feed prices as the benchmark for setting their own prices.

The farmers' association did not provide the actual feed price. But traders estimate the current rate at around 32,100 yen per tonne for January-March, down from 32,900 yen for the previous quarter.

As for South American grains, Japanese buyers have so far bought 170,000 tonnes of corn and more than 130,000 tonnes of milo from Argentina for April-June shipment, traders said.

Japanese trade houses are expected to make deals for two more cargoes, or up to 110,000 tonnes, of milo and corn from Argentina for April-June shipment, they said.

In the freight market, spot freight rates for U.S. Gulf/Japan for panamax-sized cargoes were at $23.90-$24.25 per tonne on Monday, up from $20.50-20.75 a month ago.

The U.S. Gulf/Japan freight rates for panamax shipment for late April and May were at $24.00-$24.50 a tonne on Monday, up from more than $22.00 a tonne in mid-February.

Asian panamax cargo rates for grains and minerals are likely to ease this week as a stiff rise in the rates sidelined charterers, traders said. But demand for panamax cargoes will likely remain brisk due to steady demand for coal shipments and rising demand for soybean shipments from South America.

U.S. corn premiums for April-June shipment were offered on Monday at 87-89 cents a bushel over the July contract on the Chicago Board of Trade (CBOT) on a cost and freight (c&f) basis.

SOY BUYING PROMPTED BY FREIGHT RATE RISE

Buying of U.S. soybeans was also active last week, as users moved to cover their needs before panamax cargo rates rise even higher, traders said.

A number of end-users have already finished U.S. soybean purchases for May shipment, while users who had already covered around half of their soybean needs with new crop supplies from South America were not in a rush to buy U.S. beans, they said.

Japanese soybean buyers have made deals to import over 400,000 tonnes of Brazilian new crops for March-May shipment, out of their total needs for soybeans for crushing of over 900,000 tonnes in the period, traders said.

U.S. soybean premiums for May shipment were offered on Monday at 109 cents a bushel over CBOT's May contract on a c&f basis. Brazilian soybean premiums for June shipment were offered at around 110 cents a bushel over CBOT's July contract c&f. -Reuters