March 10, 2006

 

Argentina's soy, corn prices down from previous week

 

 

Argentina's soy and corn prices closed lower Thursday compared with the previous week as pressure from the new 2005/06 soybean crop helped push cash prices down for the 2004/05 crop.

 

Cash soybeans sold for ARS515 (US$167) per tonne at the Rosario Cereals Exchange, compared with ARS530/tonne a week ago.

 

A year ago at this time cash soybeans sold for ARS495/tonne.

 

The Exchange said about 25,000 tonnes of cash soy were sold Thursday.

 

May soy futures traded hands for US$164/tonne, down from US$167 a week ago.

 

Around 2,000 tonnes of soy futures were traded Thursday, the Exchange said.

 

"There is a US$3 to US$4 premium for soybeans with immediate delivery," said one trader, noting that expectations for a record harvest are pushing prices down.

 

Eventually the old and new crops will converge and prices will merge at the lower older-crop rates, traders say.

 

Farmers are expected to begin harvesting the 2005/06 soybean crop soon.

 

The US Department of Agriculture has forecast Argentina's 2005/06 soybean crop at a record 40.5 million tonnes. The Agriculture Secretariat sees output at between 38.5 million and 40 million tonnes.

 

"Not much else is going on," the trader said. "It's fund buying in the US, more than anything that is moving prices."

 

As of March 7, Argentina had sold 10.098 million tonnes of 2004/05 soybeans for export, local Agriculture Secretariat data show. Sales of 2005/06 soybeans totalled 1.849 million tonnes by the same date.

 

Corn

 

Cash corn sold for ARS240 per tonne Thursday in Rosario, down from ARS248/tonne a week ago.

 

Prices are up from a year ago at this time, when a tonne of corn sold for ARS185.

 

Corn futures for April delivery went for US$79/tonne, way up from US$64/tonne a year earlier.

 

Farmers had harvested 7.5 percent of the 2005/06 corn crop by Saturday, according to the Buenos Aires Cereals Exchange.

 

The USDA has forecast Argentina's new corn harvest at 15.5 million tonnes.

 

The Argentine Corn Association sees production at 14 million tonnes and the Secretariat sees it at 13.8 million tonnes.

 

Last season good weather and solid prices led farmers to harvest a record 19.5 million tonnes of corn, according to the USDA. The Agriculture Secretariat says output last season totalled a record 20 million tonnes.

 

The Buenos Aires Exchange says farmers have planted 15.2 percent less corn than a year ago. It sees planted area at 2.23 million hectares, down from 2.62 million hectares the previous season.

 

As of March 3, Argentina had sold 13.99 million tonnes of 2004/05 corn for export, up from 11.16 million tonnes a year earlier, Secretariat data show.