April 23, 2004

 

 

Argentina's Corn, Soybean Prices Close Higher Thursday

 

Argentina's major grain prices closed higher Thursday, ending three days of declines after higher prices at the Chicago Board of Trade pushed local corn and soy values up, traders said.

 

Soybean prices in Rosario traded for 655 pesos ($1=ARS2.867) per metric ton on Thursday, up around ARS30 from Wednesday and up from ARS625 a week ago.

 

"The trend changed in Chicago, and as soy prices went up there, this had an impact here," a trader in Rosario said. "That's basically what happened. The same happened with corn, but the situation with wheat was different."

 

Traders estimated that between 35,000 and 40,000 tons of soybeans were sold Thursday in Rosario.

 

Local wheat prices are somewhat less influenced by the CBOT than are corn and soybean prices, traders say. Wheat values are often more determined by demand from neighboring Brazil and by demand from domestic millers.

 

Meanwhile, the Agriculture Secretariat forecast on Wednesday that Argentina would produce only 33 million metric tons of soybeans in 2003-04.

 

The estimate did not come as a surprise to analysts in Argentina, but it appeared to have some impact on trading the U.S., traders said.

 

Local analysts have long said that the U.S. Department of Agriculture has been overly optimistic in its estimates of soybean production here and in Brazil. On Tuesday, Ruben Ciani, an oilseed analyst at the Agriculture Secretariat, said the USDA's numbers are still off the mark.

 

"The USDA is very badly estimating South American production," Ciani said.

 

The USDA has estimated that Argentina and Brazil will combine to produce 91 million tons of soybeans in 2003-04.

 

"But this is way off," said Ciani. "Even in the best of cases, production will not surpass 86 million tons in South America."

 

Barring any major climatic problems next year, South American production will rise to between 97 million tons and 102 million tons in 2004-05, depending on how much planted area expands, Ciani said.

 

As for Argentina, Ciani said farmers here could harvest as many as 39.6 million tons of soybeans in 2004-05.

 

This estimate assumes farmers will collect 14.4 million hectares of soybeans in 2004-05. But even if area in 2004-05 is unchanged from this year, production will likely total 38.7 million tons, Ciani forecast.

 

Argentina is the No. 3 producer of soybeans behind Brazil and the U.S.

 

The USDA has put Argentina's 2003-04 soybean output at 35 million tons.

 

New 2003-04 crop soybeans for delivery in May sold for $229 in Rosario. Futures for May 2005 soybeans sold for $175.

 

As of Friday, farmers had collected 32% of the 2003-04 soybean crop, according to the Secretariat. This put the pace of collection up from 28% last week but way down from 53% a year ago.

 

CORN

 

Cash corn sold for ARS260 Thursday in Rosario, up from ARS245 a week ago.

 

About 20,000 tons of corn were sold Thursday in Rosario, traders said.

 

As of Friday, farmers had finished collecting 40% of the 2003-04 corn crop, the Secretariat reported. The pace of collection is scarcely up from 39% a week ago and is down from 65% a year ago, according to the Secretariat. Recent rain has slowed collection efforts.

 

On Wednesday, the Secretariat maintained its estimate for 2003-04 corn output at 12.4 million metric tons.

 

The Buenos Arise Cereals Exchange sees production at 12.8 million tons.

 

Argentina produced 15 million metric tons of corn in 2002-03, according to the Secretariat.

 

The USDA has forecast 2003-04 corn production at 12.5 million tons.

 

On Tuesday, Carlos Poullier, a corn and wheat analyst at the Secretariat, said Argentina may 14.6 million metric tons of corn in 2004-05.

 

WHEAT

 

Finally, wheat for immediate delivery sold for ARS348/ton in Rosario, compared with ARS335 a week ago.

 

On Wednesday, the Secretariat left unchanged its forecast for 2003-04 wheat production, which stands at 14.5 million tons.

 

On Tuesday, Poullier said 2004-05 output could rise to 14.8 million tons.

 

Last year, the harvest totaled 12.3 million tons.

 

Poullier's forecast is based on the assumption that farmers will plant 6.18 million hectares in 2004-5, compared with 6.01 million this year.

 

Assuming a carryover of 1.8 million tons from the most recent harvest, Poullier said Argentina will have 16.6 million tons of 2004-05 wheat to offer.

 

Poullier also estimated that after domestic demand is met, Argentina will have an exportable stock of around 9.6 million tons of wheat in 2004-05.

 

The Buenos Aires Exchange has estimated 2004 production at 13.7 million tons, compared with 12.16 million tons in 2003, according to exchange data.

 

The USDA has forecast total output at 13.5 million tons in 2004.