February 11, 2008

Mexican exchange halts trading as US wheat breaks records

Physical trading was halted in the Mexican cash grain markets last week as prices for US grains, led by spring wheat, rallied to new highs, traders and importers said Friday.

"There was so much speculation in the market so people were holding back on buying early in the week and then today the market just ran completely out of control, so all buying attempts just got stopped," said one local physicals trader.

Trade in all the other imported grains also were held back as US spring wheat soared more than 15 percent to establish all-time record highs, he said.

Some limited white corn trade was reported in the locally produced white corn crop from central Mexico's Bajio region, which is now at the tail end of its season, but volume remained "insignificant" and demand slow.

Most of the fall-winter 2007 Bajio crop has already been sold or committed to buyers and trading houses at this point in the harvest season.

Traders said that most Mexican market players were now preparing for the two months between the crop season where business is taking place in stocks already purchased from the Bajio and Sinaloa crops in the secondary market.

Prices for local white corn were trading in margins a bit higher than in recent weeks as supplies from the direct market are slowing. This pressure is expected to remain until closer to the new Sinaloa harvest in April.