February 19, 2010

Argentine corn futures down on big crop prospects

Argentine corn futures were down on the week in line with international prices and amid prospects for high yields from Argentina's crop this season.

March-April corn contracts traded at US$108 and US$112 a tonne at the Rosario Grain Exchange Thursday (Feb 18), compared to US$110 and US$113 a week ago. Spot corn was traded at ARS454 (US$117.68) per tonne.

Although there was strong interest from buyers due to an increased export quota, the weakness in overseas prices put pressure on the local market, the Rosario Exchange said.

On Wednesday (Feb 17), the Agriculture Ministry confirmed last week's announcement that it will allow 10 million tonnes of corn to be exported this year. Argentina tightly regulates corn and wheat exports, allowing shipments only after sufficient stocks are set aside for domestic supply.

Excellent growing conditions have boosted this year's corn crop, with total output likely to be significantly higher than early expectations.

On Wednesday, the Agriculture Ministry made its first production estimate for the 2009-10 crop, forecasting 19 million-21 million metric tonnes. That is up from just 12.6 million tonnes grown last season, when drought parched the crops.

Meanwhile, soy prices were little changed. Spot soy traded at ARS960 (US$243) a tonne in Rosario Thursday, unchanged from a week earlier. May 2010 soy futures traded at US$219 and US$222 a tonne, up from US$217 and US$218 a week ago.

The soy crop is also developing well, with record output expected this season. The Buenos Aires Cereals Exchange forecasts 52 million tonnes of soy this season, up from 32 million last year.

Wheat trade remained stalled as farmers wait for buyers to come out with the higher prices agreed to with the government.