South Korea buyers seek 128,000 mt corn despite price fears

Two buy tenders for South Korea’s feed corn needs were issued Thursday, with NOFI and KFAB said to be looking for 68,000 mt and 60,000 mt of corn, respectively, into the port of Busan, according to market sources.

Both tenders are said to be for May loading cargoes and June delivery, with the NOFI tender seeing offers around $203.75/mt, according to a market source.

No details are available on the KFAB buy tender as yet, but sources anticipate the supply to be sourced from the US Pacific Northwest.

NOFI last purchased corn via tender on February 9, paying $199/mt for May delivery. 

Corn price gives buyers cause for thought
The demand comes as Asia’s buyers were said to be watching the increasing price of corn as bad weather in South America and its potential impact on supply continues to see prices firm.

“Buyers are not coming to terms with the increased prices, prices are continuing to increase at least based on what I can see,” one Singapore-based trader said.

“Korean buyers are seriously looking at how the market is going. It’s too bullish both basis and futures and they’re nervous,” a second US-based source said.

On Wednesday the Rosario Exchange lowered its forecast for Argentinian corn production to 35 million mt for the 2017/2018 harvest, down from 41 million mt in the previous harvest.

Corn prices on the CME futures exchange have rallied dramatically since the start of the year, driven by a combination of weather concerns affecting wheat, soybean and corn across North and South America.

Since January 12, the front month March CBOT corn futures contract has risen from just above $3.46/bu to reach just under $3.68/bu by February 15 – the highest since September 2017.

Internally, US values have also firmed on the rush to secure corn for export, with USDA data showing bid for shuttle trains into the PNW rising to just over $5/bu on Wednesday – up from $4.38/bu on January 25, according to the data.

Alongside that, bad weather in the main transit routes from corn growing regions to the PNW export locations has slowed the supply of corn.

“I think that the only way to go is to go long and then you can sell it later – I see more demand coming to the PNW and there are limited export slots available. There’s plenty of upside,” the first trader said.