March 2, 2007

 

Argentina's grain prices fall on CBOT losses

 

 

Argentina Grain prices closed lower on the week at the Rosario Grain Exchange Thursday following a sell-off on the Chicago Board of Trade because of sharp declines in US and Chinese equity markets.

 

Corn and soy forward prices had been very high and fell sharply over the past days because of external pressures, Fyo.com analyst Florencia Collado said.

 

There were practically no sales, the Rosario Grain Exchange said in its daily market commentary.

 

Chicago Board of Trade soybean futures skidded lower Thursday (Mar 1) under pressure from heavy long fund liquidation and a bearish technical picture.

 

"The chart looks bearish right now," said Eli Tesfaye, lead trader for Crown Futures Crop. in Fairfield, Iowa.

 

Some early pressure came on the market from overnight losses, a CBOT floor broker said. Weakness in equities markets was negative for the grains, he added.

 

 

Soy

 

Spot soy fell to ARS610 (US$196.93) per tonne at the Rosario Grain Exchange Thursday, down from ARS630 a week ago. Between 12,000 and 15,000 tonnes were traded.

 

May soybeans were priced at US$193 per tonne, down from US$202 last week. Futures volume was very low as sellers waited to see if the market recovers, Collado said.

 

Despite the declines, exporters are paying a premium for quick delivery as old-crop stocks dwindle, Collado said.

 

The Agriculture Secretariat forecasts that Argentina will produce 42.5 million tonnes of soy in 2006/07.

 

The US Department of Agriculture estimates that Argentina will produce 44 million tonnes.

 

 

Corn

 

Cash corn sold for ARS380 per tonne in Rosario Thursday, down from ARS400 a week ago. Volume was estimated at 8,000 tonnes.

 

Despite the declines, cash corn price declines were limited by demand from exporters needing to cover short positions, Collado said.

 

April corn closed at US$124 per tonne, down from US$129 a week earlier. Futures volume reached just 3,000 tonnes.

 

The Agriculture Secretariat sees 2006/07 corn production of 21-22 million tonnes.

 

 

Wheat

 

Spot wheat closed at ARS350 in Rosario Thursday, unchanged from a week earlier. Trade volume totalled 3,000 tonnes. May wheat closed at US$126.50, down from US$129 a week earlier.

 

Wheat trade has been very slow for the past two weeks as farmers wait to see how the government implements a subsidy programme, Collado said.

 

Argentina will produce 14 million tonnes of wheat in 2006/07, according to the Agriculture Secretariat.

 

The USDA is expecting 14.2 million tonnes of wheat from the 2006/07 crop.