South Korea Buys Option Origin Corn On Market Lows
The Korea Feed Association (KFA) purchased about 54,000 tonnes of corn to be sourced from worldwide optional origins in a tender which closed on Tuesday.
The corn is scheduled for arrival in mid-May to early June.
A series of purchase tenders by Korean buyers were issued after US corn futures collapsed to life-of-contract lows on Monday.
KFA bought option origin corn from South Africa, Ukraine, Brazil and Argentina.
South Korea has a growing option origin account of US corn.
The corn was purchased at around $208.95 a tonne c&f including a surcharge for additional port unloading.
The c&f is different from a free-on-board, FOB, price which does not include shipping.
FBN’s Take On What It Means: We believe that KFA’s corn purchase could be well timed but brings questions about the quality and export price of US corn from the Pacific northwest. The KFA has a track record of sourcing its corn needs from the lowest origin rather than from one destination which leads us to believe that if US corn prices rise too sharply then the KFA could cancel the US sale and buy from another country.
Russian Wheat Export Prices Fall as 2020/21 Supplies Could Grow
Russian wheat export prices registered a fourth consecutive weekly decline last week, dragged down by competition with other major exporters.
Russian wheat with a 12.5% protein content, loaded from Black Sea ports, fell by $2 to $218 a tonne free on board (FOB) at the end of last week.
According to SovEcon, the prospects for the 2020 Black Sea wheat crop look positive with 83-87 million tonnes (MMT) of wheat expected in Russia.
For the 2020/21 crop year Russia has added planted wheat acres.
Ukraine is forecast to produce 26-28 MMT of wheat in 2020/21.
Russia is the world's largest wheat exporter.
Russian, Ukraine and Romania export their wheat to Africa, the Middle East and Asia through the Black Sea.
FBN’s Take On What It Means: At the moment we believe that the decline in the price of Russian wheat export prices has been a negative for HRW prices as the two are highly substitutable. We view SovEcon’s production estimate as a potential negative catalyst for the 2020/21 US hard wheat export program.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
