August 17, 2007

 

Argentine grains down sharply; trade muted on CBOT losses

 

 

Argentine grain prices plunged at the Rosario Grain Exchange on Thursday (August 16), following a sharp sell-off at the Chicago Board of Trade.

 

Trade was muted as sellers stepped out of the market to wait and see if the losses would hold.

 

"Traders were just standing in front of the news screens to see what was happening in Chicago," said Rosario Grain Exchange analyst Lorena D' Angelo.

 

Granar SA analyst Adrian Seltzer said: "There's nothing going on...nobody's selling."

 

Wheat prices were pushed down even further amid speculation among traders that the government was poised to raise the export tax on wheat, Seltzer said.

  

Wheat futures posted the sharpest losses, falling on the downward pressure from Chicago and rumours that the government was considering raising the export tax on wheat to 30 percent from the current rate of 20 percent, according to the Rosario Grain Exchange.

 

The government raised the export tax on soy by 3 percentage points earlier this year to fund a subsidy program for domestic grain consumers.

 

Rising grains prices have complicated government efforts to control inflation in domestic food prices.

 

"The rumours are generating panic and selling," Seltzer said.

 

January 2008 wheat closed at US$170 per tonne, down from US$186 a week ago.

 

Spot wheat prices were buoyed somewhat by domestic miller demand, closing at ARS500 Thursday, down from ARS505 a week ago.

   

The sharp drop in CBOT soy prices caused sellers to step out of the local market Thursday, Seltzer said.

 

May 2008 soy wasn't traded Thursday, but on Tuesday traded at US$220 per tonne, down from US$223 last Thursday.

 

Spot soy closed at ARS645 per tonne Thursday, down from ARS675 a week ago.

   

Corn prices slid in line with soybeans, according to traders.

 

Spot corn was traded at ARS365 per tonne, down from ARS370 a week ago. April 2008 corn sold at US$110 per tonne, down from US$116 last Thursday.