Platts proposes Asian corn differential over CBOT and freight forward rates in corn, soybeans matrices.

Platts, part of S&P Global Commodity Insights, proposes to expand its Asian corn and soybean coverage with the following changes with effect from July 4, 2023:

1. Launch a daily CFR North East Asia corn differential over CBOT futures;

2. Revise the corn arbitrage matrix to replace current spot freight rates with forward freight matching corn delivery periods to South Korea;

3. Revise the soybean price arbitrage matrix spot freight rate with forward freight matching soybeans delivery periods to China.

ASIA CORN

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

Platts proposes to publish a differential to CBOT futures due to evolving pricing practices by South Korean corn buyers. South Korean corn has typically traded on a flat or outright basis only, but due to increased market volatility, buyers have started to accept offers both on a flat price as well as a floating basis over CBOT futures. In addition, buying as a basis over futures is prevalent in many Asian countries like Vietnam, Malaysia and Japan that reference South Korean cargo trade flows.

The CFR NE Asian corn differential will be published in US cents/bushel to the CBOT corn futures settlement price from the previous day.

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

** Forward Freight in Asia Corn Matrix

The corn matrix currently employs 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 is proposing to address the timing mismatch between its assessments for FOB cargoes from these origins loading 2-3 months ahead.

As a result, Platts proposes to publish 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 will be 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.

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

ASIA SOYBEANS

** Forward Freight in Asia Soybeans Matrix

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

Platts is proposing to address the timing mismatch between its assessments for FOB cargoes from these origins loading 2-6 weeks ahead. As a result, Platts proposes to publish 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 will be assessed in Singapore at 4:30 pm daily, in line with the Platts Market on Close timestamp of the existing Platts soybean CFR China assessment.

The soybean arbitrage matrix will be published in the Platts Daily Grains report.

Please send any comments and feedback by June 2 to MRTS_GrainsRiceOilseeds@spglobal.com with CC to pricegroup@spglobal.com.

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