February 1, 2008

 

Argentine grain prices surge as exports opened

 

 

Argentina grains closed sharply higher on the week at the Rosario Grain Exchange Thursday (February 1, 2008), with the opening of the wheat and corn export registries buoying local prices, according to analysts.

 

The government announced days earlier that the export registries for wheat and corn would be opened, effective Thursday.

 

While a quota was not fixed for corn exports, new wheat exports will be limited to 2 million tonnes, the Agriculture Secretariat said.

 

The new wheat exports will be spread over the next five months, with a maximum of 400,000 tonnes shipped per month. Each company will be limited to declaring about 12,000 tonnes of wheat export commitments per day.

 

Spot wheat sold for ARS700 (US$221.52) a tonne in Rosario Thursday, up from ARS570 a week ago.

 

Wheat trades took on a unique form Thursday. Buyers required sellers to throw in 3 tonnes of soy at ARS1060 per tonne as a condition for buying wheat. Tight old-crop soy supplies are spurring demand for the beans from local processors, said Rosario Grain Exchange Analyst Lorena D'Angelo.

 

Spot soy sold for ARS1060 a tonne Thursday, up from ARS980 a week ago.

 

May 2008 soy closed at US$305 a tonne, up from US$290 last week.

 

Before the wheat registry closure in December, exporters had declared more than 7 million tonnes of 2007-08 wheat for export, according to the Agriculture Secretariat.

 

The 2007-08 wheat harvest is complete, with 15.4 million tonnes produced, of which 10 million tonnes might be available for export, according to USDA estimates.

 

Corn
 

Corn prices also closed sharply higher as the export registry was opened. New export commitments had been blocked since mid-2007.

 

Spot corn was traded at ARS470 a tonne, up from ARS445 a week ago.

 

March and April 2008 corn sold at US$152 a tonne, up from US$144 last Thursday.

 

Corn export declarations will be limited to 30 days in advance of shipment, compared with the year advance previously, the secretariat said Tuesday. Companies will have a 15-day grace period beyond the initial 30 days to actually complete shipment.

 

The USDA forecasts Argentina's 2007-08 corn production at 22.5 million tonnes, but local analysts expect output to be lower due to dry weather conditions and damage from a late frost.