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Asian Gains Japanese defy surging US prices

SINGAPORE: Japanese buyers, defying surging U.S. prices, are stepping up purchases of late 1996 corn, but elsewhere in east Asia buyers are sidelined or looking for cheaper origins, traders said on Monday.

Tokyo traders said buyers were undeterred, even though corn prices on the Chicago Board of Trade (CBOT) hit an all-time-high of $4.55-1/4 a bushel, basis May, last Thursday. The CBOT corn closed at $4.51 on Friday after hitting a high of $4.53.

"Our bottom line is...let's buy U.S. corn as long as it's available. Japan already bought nearly one million tonnes of U.S. corn for the October/December period," a corn trader said.

"And further buying is likely before the long Golden Week holidays in Japan late this month," he said.

Japanese corn import premiums for the Oct/Dec shipment were quoted at between 115 and 120 U.S. cents a bushel C&F over CBOT December futures, traders said.

In oilseeds, Japanese traders said they were currently buying U.S. soybeans for June shipment.

"Japan bought nearly 300,000 tonnes of soybean for the May shipment, 170,000 from the U.S. and 130,000 from Brazil," a soybean trader said.

Traders quoted U.S. soybean premiums at about 120 cents a bushel C&F over CBOT May futures.

In Manila, traders said Philippine flour millers would be driven out of the U.S. market this week by steep increases in U.S. wheat prices.

"At these prices, we're going to lose our shirts," one trader said. He said Philippine buyers would only go back to U.S. wheat if prices went down to about $4.80 a bushel.

Prices of May spring wheat in Minneapolis, where the Philippines buys most of its wheat, surged to new contract highs of $5.86 a bushel on Friday, but ended at $5.80-1/2.

The surge was helped by talk China was seeking U.S. wheat.

In Seoul, traders said the Korea Corn Processing Industry Association (KOCOPIA) and two local companies bought 157,500 tonnes of U.S. No. 2 yellow corn last Wednesday.

KOCOPIA may buy another 52,500 tonnes of U.S. No. 2 corn for September delivery this week.

Traders said they expected a downward correction of corn prices in a market they saw as extremely overbought.

If prices fall, South Korean importers may tender to buy July/August/September corn.

While corn prices remain firm, local importers are expected to increase the rationing rate for wheat and rye.

Taipei traders said Taiwan is expected to issue three tenders this week, with BSPA tendering for 54,000 tonnes soybeans.

Traders said they expected CBOT prices to continue to move up, but most thought the trend would not last for more than three months.

Local PNW freight cost is at about US$12 a tonne and the Gulf of Mexico cost is about US$22.5 a tonne, both for shipment sizes of 54,000-tonnes.

Taiwanese buyers are increasingly looking to Argentine corn and soybeans due to rising U.S. prices. Buyers usually switch to Argentine grains if the the price differential is $10 a tonne or higher, traders said.

"In recent tenders we see more Argentine shipments being considered because of the high U.S. grain price," a trader said.-Reuer