They said Japan would have to seek about 1.0 to 1.2 million tonnes of its corn requirements for July-September shipments in the next few weeks, but the purchases would be slow and only minimum amounts would be purchased.

"Basically, we don't do much import business when the markets are falling," a trader at a foreign grain firm said.

"Now, everything is weak. The yen, the Chicago market and freight rates," he said.

Gulf of Mexico-Japan freight rates fell to about $15.50 per tonne for June shipment, down from $19 in early May on slow demand for cargoes that reflects Asia's economic upheaval, along with view that draft restrictions in the Panama Canal would ease with the approach of the rainy reason.

The dollar rose to around 139 yen in afternoon Tokyo trade on market talkthat a major Japanese carmaker suffered losses on derivatives trading. Chicago Board of Trade corn futures have drifted weaker on nearly ideal crop weather in the US mid-west and on slow exports.

Asked about any possible effect on the Chicago grain futures market from Pakistan's nuclear tests, traders said impact would be limited as US farm exports were expected to be exempt from harsh mandatory sanctions. Pakistan is a major importer of US wheat.

Japanese traders said Japan was expected to buy US corn for the rest of their needs for the third quarter because prices of US origin were competitive."US origin will dominate the rest of our needs in the third quarter," a trading house trader said.

Traders said, however, Japan might buy small amounts of corn from South Africa if the offer prices declined. New crop corn from South Africa will come into the market from May to October.

One trading house trader said that corn offer prices from South Africa were currently about $8 per tonne higher than prices ofUS corn on a cost-and-freight basis. US corn premiums for shipment in the July-September period were quoted at around 76 to 80 US cents per bushel over respective Chicago Board of Trade, little changed from 77 to 80 US cents a week ago. Japan has covered about 70 per cent of its corn needs for the third quarter, traders said.