Platts launches CFR North East Asia corn differential over CBOT, freight forward rates in corn, soybean matrices from July 4, 2023

Platts, part of S&P Global Commodity Insights, has launched its daily CFR North Asia corn differential over CBOT futures and revised its forward freight on the corn and soybean arbitrage matrix, from July 4, 2023.

Platts has also launched differentials to spot shipping rate assessments in the corn and soybean arbitrage matrices to account for market structure and to address the timing mismatch between the corn and soybean assessment shipment window and the spot freight assessment to better reflect the replacement values for cargoes for each FOB origin.

This launch follows an initial proposal note published June 6: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/060623-platts-to-publish-asian-corn-differential-over-cbot-update-freight-forward-rates-in-corn-soybean-matrices-from-july-4-202

Asia corn

** New assessment: CFR NE Asia Corn basis over CBOT futures

The new assessment, Corn CFR North East Asia Basis, is launched due to evolving pricing practices by South Korean corn buyers and buying as a basis over CBOT futures is prevalent in many Asian countries like Vietnam, Malaysia and Japan.

The CFR NE Asian corn differential reflects a 4.30 PM Singapore (0830 GMT) cutoff time and will be published in US cents/bushel to the latest CBOT corn futures settlement price available, which corresponds to the previous day in the US.

The relevant futures contract month letter code will be published next to the basis value.

** Forward Freight in Asia Corn Matrix

The corn matrix previously employed spot freight assessments, 10-25 days ahead, to calculate arbitrage margins for cargoes from US Pacific North West, US Gulf, Ukraine, Brazil and Argentina origins to North Asia.

Platts addressed the timing mismatch between its assessments for FOB cargoes from these origins loading 2-3 months ahead.

As a result, Platts launched a differential to the spot shipping rate to account for market structure. The final freight will be published in the arbitrage matrix appearing in the Daily Grains and Oilseeds report.

The freight differentials are assessed in Singapore at 4:30 pm (0830 GMT) daily, in line with the Platts Market on Close timestamp of the existing Platts corn CFR NE Asia assessment.

Asia soybeans

** Forward Freight in Asia Soybeans Matrix

The soybean matrix previously employed spot freight assessments, 10-25 days ahead, to calculate arbitrage margins for US Gulf Coast and Brazil origins to North China.

Platts addressed the timing mismatch between its assessments for FOB cargoes from these origins loading 2-6 weeks ahead. As a result, Platts launched a premium or discount to the spot shipping rate to account for market structure. The final freight will be published in the arbitrage matrix appearing in the Daily Grains and Oilseeds report.

The freight differentials are assessed in Singapore at 4:30 pm daily (0830 GMT), in line with the Platts Market on Close timestamp of the existing Platts soybean CFR China assessment.

The new CFR NE Asian corn price differential over CBOT futures assessment will be published in Platts Agriculture Alert page 2440. The Platts Corn and Soybeans Arbitrage Matrix is published in PAA pages 2622, 1622 and 0622. The corn, soybeans arbitrage matrix and CFR Asian corn price basis will also be published in the Platts Daily Grains report.

In line with this, Platts adds the following additional assessments codes to reflect the new assessment and forward freight adjustments:

CNEBA00 Corn CFR North East Asia Basis

CNEBA03 Corn CFR North East Asia Basis MAvg

USPFA00 US Gulf-Pyeongtaek Freight Cost Mo02

USPFB00 US PNW-Pyeongtaek Freight Cost Mo02

USPFC00 Ukraine-Pyeongtaek Freight Cost Mo02

USPFD00 Argentina-Pyeongtaek Freight Mo02

USPFE00 Brazil-Pyeongtaek Freight Cost Mo02

USPFF00 Brazil-N China Freight Cost Mo01

USPFG00 US Gulf-N China Freight Cost Mo01

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