July 24, 2009
Argentina soy prices follow CBOT higher; wheat, corn trade muted
Argentine soy prices posted solid gains on the week on the back of strength at the Chicago Board of Trade, while corn and wheat trade was muted as farmers hold out for higher prices.
"Better prices for futures in the external market helped push up prices in the few products traded in the session," the Rosario Grain Exchange said.
"From the start (Thursday) sellers waited for better offers to make deals. The rise in soy spurred some trade, but with low volume in anticipation of higher prices," the exchange said.
Spot soy were traded at between ARS940 (US$247.10) and ARS950 (US$249.73) a tonne in Rosario, up from between ARS885 and ARS915 a week ago.
May 2010 soy futures traded at US$220 and US$222 a tonne, up from US$214 and US$216 a week ago.
Spot corn was traded at ARS400 a tonne, up from ARS390 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 ARS468 per ton. That theoretical Free-Alongside-Ship price is the Free-On-Board price minus export taxes.
Corn trade has been muted over the last month 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 1 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, unchanged from a week ago.
Spot wheat was last traded at ARS654 on June 18. The government's theoretical FAS price on Thursday was ARS656 per ton.
US$1 = ARS 3.80 (July 24)
