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Asia Grains-Asian mills step up wheat purchases as dry weather threatens crops

Published 02/10/2015, 06:23 pm
© Reuters.  Asia Grains-Asian mills step up wheat purchases as dry weather threatens crops

* Indonesia books 60,000 T of Australian prime wheat

* Philippines in market to take 50,000 T of milling wheat

By Naveen Thukral

SINGAPORE, Oct 2 (Reuters) - Flour mills in Asia locked in deals to buy wheat this week as a threat to supplies due to dry weather in parts of Australia, the United States and the Black Sea region lifted global prices.

Indonesian millers booked 60,000 tonnes of Australian prime wheat for shipment in December-January at around $225 to $230 a tonne, traders said. Millers in the Philippines have issued a tender to purchase 50,000 tonnes of soft white and spring wheat for arrival in March-April, they added.

"We saw some activity from Tuesday onwards as global prices continued to rally," said one Singapore-based trader who was aware of the deals. "Indonesian mills have taken one cargo and there is discussion going on for more shipments, we expect there will be active discussion next week."

U.S. wheat futures rose for a third session on Friday with the market headed for a fourth consecutive week of gains on concerns over dryness threatening supplies in the world's top exporting countries. GRA/

Chicago Board Of Trade December wheat WZ5 has gained almost 11 percent in four weeks.

A U.S. Department of Agriculture report trimmed its U.S. wheat production outlook more than expected, while also putting quarterly stocks below the average trade estimate.

Russia is expected to harvest 100 million tonnes of grains by clean weight this year, down 5 million from last year's near record level, Russian Prime Minister Dmitry Medvedev told a government meeting on Thursday.

In Australia, farmers are worried about hot and dry weather in the weeks ahead which could reduce yields.

"People have already started revising their production estimates lower," said one Sydney-based analyst. "We have seen hot and dry weather in the past few weeks and it is expected to continue like that on the east coast."

Indonesian millers were engaged in discussions to take at least three to four more cargoes of 50,000 to 60,000 tonnes each from Australia, a second trader said.

In the feed grain market, Thailand has been snapping up cheap feed from the Black Sea region. It has largely booked cargoes right up to March, taking about 150,000 tonnes a month.

Feed wheat prices have also started edging up amid weather concerns. Ukrainian feed wheat was quoted at $200 a tonne, including cost and freight, to Thailand for November shipment, $204 a tonne for December and $208 for January, traders said.

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