South Africa piles in on Asia corn buying with sale to Taiwan's MFIG

A fourth straight day of corn buy tenders issued by Asian feed companies is believed to have been met by South African corn, Singapore-based traders said Friday.

Taiwan's MFIG joined South Korea's KOCOPIA, MFG, KFA and NOFI in tendering for feed corn with buyers seemingly jumping as corn prices have nudged higher.

The new tender is for 52,000 mt for delivery in late May or early June with the origin thought to be South Africa.

Thursday saw two cargoes tendered for the Korean Feed Association, with Pan Ocean and ETG said to be the sellers at levels of $221 and $223/mt, according to a market source.

The cargoes were for delivery end May through early June and the first half of June, with the region's corn buying approaching three-quarters of a million mt in four days – with much of the volume expected to be sourced from the US.

South Africa capitalises

South Africa has seen some concerns over its crop as the country has suffered pronounced water shortages on the back of a drought.

But with rains recently arriving at a key point in the crop’s development, and backed by substantial corn stocks, the country looks on course to see decent volumes available for export.

The USDA in its March WASDE report added 500,000 mt to South Africa’s corn production, taking it to 13 million, while the country’s agriculture ministry anticipated a 12.2 million mt harvest, split between 6.1 million mt of feed corn, and 6.1 million mt of food corn.

With the US currently the go-to corn supplier for much of the world, logistics issues have seen cash premiums creeping up, while South America is out of season and Ukraine has seen farmers waiting on higher prices before selling.

That leaves South Africa in a position to capitalise, according to the market source.

“At these values, exporters are getting a decent origination margin,” the trader said, although in terms of the final crop size he warned “there’s still a lot of weather to come.”