May 3, 2013 / 8:22 AM / 4 years ago

Asia Grains-Australian wheat prices climb as dryness slows planting

* Australian wheat prices up on dry weather conditions

* Buyers reluctant to sign deals at current prices

* South American corn climbs as CBOT futures rally

* Market eyes Indian wheat export tenders

By Naveen Thukral

SINGAPORE, May 3 (Reuters) - Australian wheat prices gained more ground this week as dry weather threatened planting across the country’s eastern grain belt, while Asian corn buyers stayed away from the market amid rising global prices.

Farmers in Australia slowed old-crop wheat sales as lack of moisture in New South Wales, the country’s second largest wheat producing state, and Victoria delayed planting for the 2013/14 crop, traders said.

“U.S. cash prices have remained largely unchanged since last week but Australian prices are firming,” said one Singapore-based wheat trader. “Farmers are not keen to sell as they are expecting higher prices, given the dry weather we have seen in some of the growing regions.”

In Asia’s physical market, Australian prime wheat with 10.5 percent protein was quoted around $360 a tonne, including cost and freight (C&F), up $10 from last week. Australian standard wheat was being offered almost at par prime wheat with a lack of old-crop supplies in the market.

U.S. soft white wheat was quoted at around $320 a tonne, winter wheat at $350 a tonne and spring wheat at $370 a tonne.

The Australian wheat crop needs significant rainfall in the weeks ahead to avoid yield losses.

Last week, Asian millers were looking to buy around 300,000 tonnes of wheat for July shipment but traders said buyers were reluctant to sign new deals at current prices.

Still, South Korea’s CJ CheilJedang Corp purchased 48,900 tonnes of U.S.-origin milling wheat in a tender which closed on Tuesday.

South American corn prices rose about $15 a tonne to $295-$300 a tonne C&F, tracking gains in the global corn market. But most buyers in Asia were unwilling to sign new contracts with local supplies expected to hit the market in July.

“Vietnam, Thailand and Indonesia will have domestic supplies coming in by July,” said one feed grains trader with an international trading company in Singapore. “They are not really keen to jump into the market right now and chase these high prices.”

Chicago corn futures climbed to a one-month high this week as wet weather continued to delay U.S. planting already running at a record low pace across the Midwest grain belt.

Chicago Board of Trade front-month corn has climbed more than 8 percent this week, its biggest weekly gain since July. Wheat is up 4.5 percent in its strongest weekly performance since mid-March. Soybeans have added 1.1 percent this week.

Some buyers in Asia are well supplied with corn, traders said. Indonesian millers signed contracts to buy about 200,000 tonnes of South American corn before the rally in prices.

The market is closely watching results of Indian wheat export tenders issued by the state-run trading companies. India’s State Trading Corp, MMTC Ltd and PEC Ltd have issued separate tenders to sell a combined 310,000 tonnes of wheat for June shipment. (Editing by Tom Hogue)

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