US PNW in hot seat as S Korea’s NOFI buys from LDC at $212/mt

South Korea’s Nonghyup Feed Inc (NOFI) and bought 69,000 mt of corn from Louis Dreyfus with the sale tipped to be the first sourced from the US Pacific Northwest in the 2019/20 marketing year, trade sources told Agricensus Thursday.

NOFI issued a tender to buy corn to arrive by April 15, although subsequently appears to have accepted an early April 1 arrival date, with the deal settled at $211.95/mt CFR, according to traders.

If sourced from the PNW, it would mark the first major sale of US corn into one of South Korea’s feed sector for several months after Ukraine and South American domination.

Separately, market sources also reported that rival feed making association Feed Leaders Committee (FLC) also picked up US corn privately from Cargill, securing 66,000 mt at $207.49/mt for January 25-February 25 shipment.

NOFI – South Korea’s largest feed maker – invited offers on four positions: worldwide origin, two US-based origins with different qualities, and a South American option.

It also invited offers for both number 2 grade yellow corn and a lower quality number 3 grade yellow corn, according to documents seen by Agricensus.

The move is thought to be an attempt to broaden the company’s options for buying US corn after a long, damp growing season raised the likelihood of the crop being dogged by moisture and quality concerns.

“Normally 2YC is 2-3 cents higher than 3YC. Maybe they are ready to pay a premium. 3YC is feed grade, and 2YC is food grade used for corn wet milling,” one South Korea-based trade source said.

NOFI previously tendered for the April 15 position on December 23 but passed on the offers it received at the time due to high prices.

Other, private deals were also said to be under negotiation on Thursday.

Quality

Key for Thursday’s tender will be the moisture content, with NOFI’s documents calling for a maximum of 14.5% on both positions.

Much of the US corn crop is coming in at around 15% after heavy rain delayed planting and pushed the harvest period into later, wintery weather.

Problems have been compounded by a lack of propane gas to power driers, meaning significant portions of the US crop are wetter than usual, which has raised fears for storage and fungal infections.

“I believe there may be some additional quality issues – damage, test weight, mycotoxins, so we’ll see,” a US-based market source said of the potential challenges facing current US corn supply in South Korea tenders.

For more information on South Korea’s tenders, see our Tender Dashboard.

Updated to provide details of results. Updated to provide details of private buying.