January 19, 2007

 

Argentina's grain prices up on higher CBOT

 

 

Argentine soy, wheat and corn prices saw steady gains over the past week, following similar moves in Chicago, according to analysts.

 

However, trade was muted Thursday (Jan 18), as "volatility in external markets and the latest government decisions affecting agricultural markets are keeping traders calm while they wait for more clarification," the Rosario Grain Exchange said in a market report.

Last week, the government announced that it would subsidise domestic food prices with a 4 percent increase in soy export taxes.

 

Export taxes on soybeans were increased to 27.5 percent, while soymeal and soyoil are now taxed at 24 percent.

 

Argentina has fixed the reference price for subsidies on local grain supplies at ARS370 (US$120) per tonne for wheat, ARS524 for sunflower, ARS293 for corn and ARS462 for soybeans.

 

Domestic wheat flour producers will receive direct subsidies to compensate for the spread between the official reference price and actual prices at the local exchanges.

 

Dairy, pork, poultry and feedlot beef producers will also receive subsidies to compensate for increasing corn

feed costs.

 

 

Soy

 

Spot soy closed at ARS605 per tonne at the Rosario Grain Exchange Thursday, up from ARS580 a week ago. May soy closed at US$195, up from US$180 per tonne a week ago.

 

The Agriculture Secretariat forecasts that a record 16.05 million hectares will be planted with soy in 2006/07.

 

The US Department of Agriculture estimates that Argentina will produce 42 million tonnes of soy from the 2006/07 crop.

 

 

Wheat

 

Spot wheat closed at ARS375 in Rosario Thursday, up from ARS370 a week earlier. March wheat closed at ARS388 up from ARS380 a week earlier.

 

Argentina will produce 13.7 million tonnes of wheat in 2006/07, according to the Agriculture Secretariat.

 

The US Department of Agriculture is expecting 14.2 million tonnes of wheat from the 2006/07 crop.

 

 

Corn

 

Cash corn was not traded in Rosario Thursday, but sold for ARS420 per tonne Wednesday up from ARS395 a week ago, according to Granar S.A.

 

Exporter demand for new crop corn helped to sustain recent gains, according to the Rosario Grain Exchange. March corn closed at US$125 per tonne, up from US$117 a week earlier.

 

Argentina will plant an estimated 3.5 million hectares of corn during the 2006/07 crop cycle, according to the Agriculture Secretariat.

 

The USDA estimates that Argentina will produce 19 million tonnes of corn during 2006/07.