July 17, 2009

Argentine soy prices followed the CBOT lower on the week, with light trade as farmers hold out for a rebound.

 

Supportive weather in the US boosted crop prospects, driving down international soy prices, the Rosario Grain Exchange said.

 

Spot soy were traded at between ARS885 and ARS915 a tonne in Rosario, down from between ARS910 and ARS940 a week ago.

 

May 2010 soy futures traded at US$214 and US$216 a tonne, up from US$213 a week ago.

 

Spot corn was traded at ARS390 a tonne Thursday (Jul 16) in very light trade as farmers wait in hope for the higher prices agreed with the government.

 

On Thursday, the government's theoretical price that farmers should receive for spot corn was set at ARS463 per tonne. That theoretical Free-Alongside-Ship price is the Free-On-Board price minus export taxes.

 

Corn trade has stalled since June 16 as exporters are hesitant to buy at the government's set price and most farmers refuse to sell at a lower price.

 

On June 16, Argentina's grain exporters reached a deal with the government to buy up to three million tonnes of 2009-10 corn and an additional one million tonnes of new crop wheat at a theoretical price set by the government. In exchange, the exporters will be ensured export permits for the surplus wheat and corn from the 2009-10 crop.

 

The deal is designed to boost local corn prices, which have been trading at a discount due to a risk premium because of the government's intermittent closing of exports.

 

The government hopes the new agreement will stimulate wheat and corn planting this season amid signs that the area planted with the crops will fall sharply as farmers continue a major shift to soy.

 

December wheat was traded at US$145 a tonne Thursday.

 

Spot wheat was last traded at ARS654 on June 18. The government's theoretical FAS price on Thursday was ARS656 per tonne.

              

US$1 = ARS3.8030 (Jul 17)