Asian buyers rush into feed wheat market, prices may fall marginally

Source:  Oilworld
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Regional feed buyers in Southeast Asia and North Asia entered the market with four tenders for imported feed wheat on January 22, although market participants noted that trade prices were unlikely to decline significantly as the bearish trend in the market may have exhausted itself.

Given Australia’s large production of low-protein wheat in the 2024-25 marketing year (October-September), particularly in Western Australia, market participants believe Australia will be the most competitive source for shipment periods demanded by South Korea and the Philippines, as the competitive export window for South American and US feed wheat sourced from the Pacific and Northern Australia has passed, and the new crop from the EU is too early to enter the market.

Given the lack of competition from other suppliers, market sources say Australian wheat exporters are unlikely to push sales too aggressively into tender markets, especially as sales from producers remain low in most Australian states.

“With the exception of South Australia, where sales should be pretty good due to lower production this season, producer sales in other states such as Western Australia and New South Wales are still pretty low, probably less than 50% sold,” a grain trading source in Victoria said.

This in turn will limit the downside potential for Australian feed wheat prices in the near term, the sources added.

Platts, part of S&P Global Commodity Insights, last assessed Australian Standard White unwarranted protein unchanged that day at US$240 per tonne FOB Australia. The price was US$240 per tonne FOB Australia on January 21.

To date, Australian feed wheat shipments for delivery to the Philippines in 2025 have traded between $250/t and $260/t CFR, according to trade data obtained by Commodity Insights. Similar trade levels were seen with Thailand for delivery in March onwards, while in South Korea, feed wheat from the US PNW was able to establish a more competitive price up to March delivery due to sharper transportation costs, although sources noted that levels for delivery in April onwards would be higher, tracking the seasonal decline in export availability.

Several trade sources noted that the TFMA feed wheat tender provided a good opportunity for price discovery, given how far ahead the cover position is compared to its peers in the region, and how the position overlaps with the typical competitive window for European new crop wheat. However, market participants also cautioned that performance may be more limited than expected, as it is too early to have a clear picture of the crop profile and yields of European new crop wheat, and few sellers may be willing to risk offers at such an early stage.

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