Japan purchases 1.3 million tonnes of feed corn for Q4, still needs 60% more as buyers wait for prices to decline

Andrew Rogers

Andrew Rogers

Aug 23, 2011 – Industry Intelligence

LOS ANGELES , August 23, 2011 () – Japan, the world’s largest importer of corn, is being watched by traders as the country has yet to purchase 60% of its required feed corn for the fourth quarter, and buyers are waiting for prices to go down, trading executives said Aug. 23, Dow Jones Newswires reported the same day.

Japan purchases nearly 3.2 million tonnes of grain for feed each quarter, but has only purchased about 1.3 million tonnes of feed corn for its October-December shipments, the executives said.

Nearly all shipments come from the U.S., an importer in Tokyo said. The current prices levels of US$7.40 a bushel for December delivery corn on the Chicago Board of Trade is ‘too high’ for Japanese importers, according to one trader. Japan is purchasing corn nearly $2.10 per bushel over the prices of CBOT futures, cost and freight.

Compound-feed manufacturers in Japan have finalized pricing for about 30% of corn purchases for October delivery, but none for November or December shipment, according to trade estimates.

Average futures price were set for October at about $6.75 a bushel, which with freight and cost works out to around $350 a tonne, said an executive with a global commodities trading company.

Buyers are waiting, as current prices put imports around $375, cost and freight, traders said. Offer prices went over $400 a tonne in June.

When the new U.S. crop hits the market traders expect prices to decline. Once corn on the CBOT falls below $7.00 a bushel, compound feed manufacturers in Japan may start price cargoes for shipment in November and December, analysts say.

The primary source of this article is Dow Jones Newswires, New York, New York, on Aug. 23, 2011.

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