Asia Grains-Vietnam buys US soymeal, Indian corn exports ease

Fri Feb 1, 2013 2:05am EST

* Vietnam buys US, Argentine soymeal for March-April

* Demand for Indian corn weakens, prices under pressure

* S.Korea buys Indian wheat, traders eye more deals

By Naveen Thukral

SINGAPORE, Feb 1 (Reuters) - Vietnamese feed mills bought U.S. and Argentine soymeal this week for March-April shipment, while demand for Indian corn slowed in some of its top markets amid cheaper supplies from South America.

Vietnam bought around 40,000 tonnes of U.S. soymeal for March shipment at $540 a tonne and took 80,000 tonne of Argentine meal for delivery in April at $495-$500 a tonne, traders said.

"Normally, Vietnamese buyers don't book cargoes so much in advance but I think prices from South America are really attractive," said one trader in Singapore. "They took two boats from Argentina and there is room for some more."

Indian soymeal is losing market share in Southeast Asia with competitive offers being made for new-crop South American cargoes. Soymeal from India is being offered around $555-$560 a tonne for February and March arrival.

Brazil and Argentina are on track for near-record soybean and corn production but adverse weather in recent weeks has underpinned the market.

Overly wet conditions have stalled early harvest in Brazil and persistently dry weather has threatened corn and soybean crops in neighbouring Argentina. Crops from both major exporters are crucial for replenishing tight global supplies.

Chicago Board of Trade benchmark March soybeans have risen 2.4 percent so far this week, the market's fourth week of gains, while corn has gained almost 3 percent, rising for three out of four weeks. Wheat is up 0.4 percent following losses last week.

Indonesia is largely covered for soymeal supplies up to June while Thailand has booked orders right up to August and September, taking advantage of competitive offers from Latin America.

Vietnam is still open for around 100,000 tonnes for March and 150,000 tonnes for April arrival.

In the corn market, demand for Indian cargoes is slowing in Indonesia and Malaysia which is putting pressure on prices.

"Indonesia has its domestic supplies whereas only some containers have been traded in Malaysia this week," said another Singapore-based grains trader.

"It is not just lack of demand but there is pressure from cheaper corn being offered from Latin America."

As result of weakening demand, Indian corn prices slid to $310 a tonne, C&F, from $320 a tonne quoted at the beginning of the week. This compared with South American corn being offered around $330 a tonne.

The wheat market is expecting more supplies from India in the weeks ahead although infrastructure bottlenecks in the South Asian country could hamper shipments.

South Korea's Major Feedmill Group purchased 110,000 tonnes of feed wheat all likely to be sourced from India in directly negotiated deals this week.

Some 55,000 tonnes was purchased for arrival at Pyeongtaek port by May 30 at $324.50 a tonne, C&F. A further 55,000 tonnes was also purchased at $324.50 a tonne for delivery at Kunsan port.

"Indian wheat is selling in South Korea, Thailand and the Philippines largely for animal feed," said the second Singapore trader. "We expect strong demand for Indian wheat as not much feed wheat is available from other origins."

India is considering allowing additional wheat exports to cut huge stocks at government warehouses and make room for the new season's harvest, Food Minister K. V. Thomas said.

After lifting a four-year-old ban on wheat exports by private traders in 2011, the government approved 4.5 million tonnes of exports from its overflowing warehouses last year, and more than 2 million tonnes of this total is yet to be shipped. (Editing by Himani Sarkar)

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