April 18, 2008

 

Argentine soy up on CBOT, volume low as strike talks continue

 

 

Argentine soy prices were up on the week at the Rosario Grain Exchange Thursday, in line with the Chicago Board of Trade.

 

However, volume was much lower than the average during this time of the year due to uncertainty as farm groups negotiate with the government to avoid the resumption of a three-week strike that crippled agricultural markets last month, the Rosario Grain Exchange said.

 

The strike was suspended April 2 for 30 days to facilitate negotiations with the government.

 

Farmers say they will resume their strike at the beginning of May if the government does not give ground over a controversial export tax on grains.

 

Last month, a sliding scale tax was implemented with rates increasing as export values rise. At current prices, the export tax on soy rose to about 39 percent, compared with the 35 percent levy previously imposed.

 

Soy prices rose in line with Chicago, but harvest pressure limited the gains, according to the Rosario Exchange.

 

Volume was low as farmers hold stocks until they see higher prices and the result of negotiations with the government, the exchange said.

 

Spot soy sold for ARS875 (US$275.60) per tonne at the Rosario Exchange Thursday, up from ARS860 a week ago.

 

May 2009 soy traded at US$286 at the Buenos Aires Cereals Exchange, up from US$282 last Thursday.

 

Meanwhile, spot corn traded at ARS510 per tonne at the Rosario Exchange, down from ARS515 last week.

 

April 2009 corn traded at US$161 a tonne at the Buenos Aires Cereals Exchange, unchanged from last Thursday.

 

Corn prices found some support from exporters needing to fill orders, but the government has been stalling shipments through procedural red tape. Customs agents are slowing export permits by demanding additional documentation before clearing shipments, according to the corn growers chamber, Maizar.

 

US$1 = ARS3.18 as of April 18, 2008