Turkish Grain Board’s corn tender unlikely to move market prices: traders

The Turkish Grain Board, or TMO, has issued its first corn procurement tender since 2022, but multiple traders and brokers expect minimal impact on export, import, and local corn prices.

TMO announced a tender for 350,000 metric tons of corn Feb. 20, scheduled to finalize Feb. 26. This marks TMO's first corn procurement tender since 2022. The move aims to reinforce stocks after previous purchases during the harvest, according to a TMO source, adding that "we are replenishing."

The tender will have little effect on corn export prices, according to multiple traders and brokers, noting that despite the tender focusing on imported corn, demand for new purchases is expected to be minimal, so import prices are likely to remain stable.

"The tender should be covered mostly with corn already in warehouses plus CIF March purchases that were already bought," a Turkish broker said.

"I don't think there is 350,000 mt at the bonded warehouse. My guess is around 200,000 mt," another broker said.

The allocation plan divides the 350,000 mt among several ports, including Iskenderun, Adana, Mersin, Tekirdag, Karasu, and Samsun, with each receiving 25,000 mt. Shipments to TMO are scheduled for March 9-April 6.

"Most of it, especially 90% for Marmara Ports and Izmir, will come from bonded warehouses or already contracted but not yet shipped March positions for Turkish clients," a third broker from Istanbul said.

Local corn prices in Turkey remain steady, with a trader from Istanbul reporting prices at approximately $275-$280/mt.

"Market conditions remain unchanged; local prices were already higher," the trader added.

However, some traders and buyers are concerned about the impact on import license prices.

"TMO's selling price was affordable, around Turkish Lira 12,200/mt," a buyer from a Turkish feed mill said. "If they keep this level, many users will prefer to buy from TMO unless they lack the required inward document. This action will likely affect inward document prices."

"The import license, which is already scarce and difficult to obtain, might experience a significant price decline as a result of this tender," the broker from Istanbul also said.

Meanwhile, Ukrainian traders do not expect the tender to affect their market significantly.

"There is some shy demand from Turkey for the March shipment after TMO, but not much," a seller from Ukraine said. "I don't think prices will rise for now, as the tender is only for 350,000 mt -- it's not enough to move the Ukrainian market."

Platts, part of S&P Global Energy, assessed Ukrainian corn FOB POC at $222/mt for loading during March 20-April 3, on Feb. 20.