August 14, 2009

Argentine soy prices held firm this week, despite weakness in international prices, due to solid demand from local crushers.

 

Spot soy were traded at ARS1000 (US$261) a tonne at the Rosario exchange Thursday (August 13), unchanged from a week ago.

 

May 2010 soy futures traded at US$226 a tonne, compared to US$230 to US$232 a week ago.

 

Despite the firm demand from crushers, volume was weak as sellers waited for higher prices to put in sell orders, the exchange said.

 

Local millers continue to be the only buyers in the market while traders wait to see if the government and exporters will reach an agreement over shipments, according to the exchange.

 

December wheat traded at US$155 per tonne, down from US$155.50 Wednesday. December wheat wasn't traded last Thursday. Spot wheat hasn't been traded since mid-June.

 

Corn trade also continues to be muted as the market awaits an export deal.

 

Neither spot corn nor futures were traded Thursday.

 

Argentina is working on an agreement with exporters to open up corn and wheat exports while ensuring adequate domestic supply, Cabinet Chief Anibal Fernandez announced last week.

 

The government and grain exporters were expected to ink a deal this week, but little progress appears to have been made so far.

 

Wheat and corn exports are tightly regulated to ensure local supply and shield consumers from rising food prices. The government sets aside a predetermined estimation of domestic demand and then only clears the surplus for export.

 

Exports of corn and wheat are likely to fall sharply next season due to a steep drop in area planted with those grains.

 

US$1 = ARS3.83 (August 14)