July 30, 2007

 

Mexico Cash Grains: Some soybean, white corn trade seen

 

 

Physical trading was modest last week in the Mexican cash grains market as purchasing prices for both locally produced and imported grains remained high, traders and importers said Friday (July 27).

 

But new purchasing was reported in both the soybean market as US import prices came off last week's highs, as well as in the local white corn market, which is now at the end of the 2006/07 fall-winter harvest in northern Sinaloa.

 

"There was some deals in soybean as some importers took advantage of the prices coming down a bit, and we also heard of some new business in white corn from Sinaloa, but we are not talking any major volumes," said one trader by telephone from central Mexico.

 

With all estimates pointing to a new record harvest in Sinaloa of up to 5 million tonnes, warehouses are filling up quickly with new supply, and grains processing companies are in no rush to buy supplies.

 

Although at least 70 percent of Sinaloa's white corn harvest traditionally is used by industrial manufacturers of tortillas, a thin corn pancake, the remainder of the crop is sold for use as animal feed in the livestock industry and competes with the cheaper imported yellow corn.

 

White corn prices in Sinaloa were marginally lower, after a month-long dispute between growers and buyers over the pricing level, with traders arguing that the prices should come further down with the record crop in store.

 

Wheat prices, meanwhile, were higher as most Mexican importers have started to quote offers against the more forward December contract, while sorghum and yellow corn markets were quiet.

 

Corn and wheat futures were trading weaker in mid-session Friday at the Chicago Board of Trade with active September corn down 1 1/2 cents at US$3.16 cents per bushel and December wheat down 6 cents at US$6.63 per bushel.

 

Soy products, meanwhile, were also trading lower with active August soybeans down 6 1/2 cents at US$8.56 a bushel in mid-session and August soymeal futures down US$1.30 lower at US$216.40 per short tonne.