March 19, 2011

 

Argentine soy plunges on Japan disaster

 

 

Argentine soy prices fell sharply this week as the Japan quake and ensuing tsunami and nuclear crisis in the country rocked global commodity markets.

 

Although international soy prices rebounded on Thursday (March 17), it wasn't enough to make up for the earlier losses.

 

Spot soy traded for ARS1,260 (US$315) per tonne at the Rosario exchange Thursday, down from ARS1,330 (US$329.55) a week ago. May 2011 soy futures went for US$315, down from US$322 a week ago.

 

Despite the losses, traders are optimistic that prices will bounce back quickly once the situation in Japan is brought under control.

 

"The fundamentals are still positive and assuming that nothing unexpected happens in Japan and the Middle East, we're going to go back up," Cortina Beruatto SA trader Jose Frogone said in a market note.

 

That would come as good news to farmers who are poised to launch the 2010-11 soy harvest. Production is expected to reach 48.8 million tonnes, according to the Buenos Aires Cereals Exchange. That would be the second-largest soy crop ever grown in Argentina.

 

Meanwhile, May 2011 corn contracts traded at US$185 per tonne in Rosario Thursday, unchanged from a week ago. Spot corn sold for ARS710 (US$175.93) a tonne. Argentina is the world's second-largest corn exporter.

 

Earlier Thursday, the Agriculture Ministry made its first forecast for corn production, pegging the crop at 20.5 million tonnes, down 10% on the year. Despite more area planted with corn, early drought hurt yields, the ministry said.

 

Farmers are moving forward with the early corn harvest, although recent showers have delayed work. To date, 9% of the corn crop has been harvested, 14 percentage points behind the pace at this time last year, according to the Buenos Aires Cereals Exchange.

 

Wheat wasn't traded in Rosario on Thursday, but sold at US$200 a tonne last week.