End of strike to weigh on Argentina's crop prices

Asian grain prices are likely to come under fresh downward pressure this week as the end of strike by dockworkers in Argentina is likely to spur fresh sales, trading executives said Monday (April 5).

Last week's bearish plantings intentions report by the USDA is also expected to continue to spur fresh selling when investors resume trading after the Easter holidays, they said.

"The strike in Argentina lasted hardly 10 days and all the talk of supplies getting crimped were exaggerated," a Singapore-based executive at a global trading company said. The opposite is now occurring, with fresh deals now being negotiated for Argentine soymeal and corn for Asian destinations, he said.

According to another trader, as more South American supplies are offered for Asian destinations, corn and soybean prices will fall.

Prices had shot up following the strike in Argentina as investors covered short positions and engaged in speculative buying, but they have already started to decline, analysts said.

Last week, the May corn futures contract on the CBOT lost 11 3/4 cents, or 3.3% on the week, ending at US$3.44 1/2 per bushel Thursday. While May soy futures contract lost 33 cents on Wednesday and recovered only one cent on Thursday to end the week at US$9.42/bushel.

The USDA estimated US 2010-11 soy planted acreage at a record 78.098 million acres, up from 77.5 million acres the previous year.

"US soy stockpiles are above expectations, which coupled with projected rise in acreage and a massive flow of South American beans can drag down prices," a Tokyo-based analyst said.

The USDA estimated corn stocks as of March 1 at 7.694 billion bushels, up from 6.954 billion bushels a year earlier. Corn acreage was projected at 88.798 million, up from 86.5 million acres last year.