October 8, 2007

Mexico cash grains: Some soy, wheat buying as US prices drop

Physical trading was modest this week in the Mexican cash grain markets and some purchasing of soy and wheat was reported as US import prices came off recent highs, traders said Friday (October 5).

"There's hasn't been that much activity, but there was some business done this week, mostly people were looking at soy orders with prices off the high levels we saw last month," said one trader with an importer in Mexico City.

Another trader said there had been reports of some wheat buying, where import prices also were off the unprecedented highs seen in September.

But trade in most both locally produced and imported grains remained depressed amid the continuing high pricing levels in the US, which have led to speculative buying that few traders want to participate in.

"This is just too risky, we are only buying if we absolutely have to but at these levels we are not too eager to participate," said one Mexican trader.

Trading also continued at a slow pace in Mexico's 2006-07 fall-winter white corn harvest from northern Sinaloa, where the harvest ended about a month ago at close to a record 5.0 million metric tonnes.

Corn and wheat futures closed mixed Friday at the Chicago Board of Trade, with active December corn closing unchanged at US$3.42 1/4 per bushel while December wheat settled down 16 cents at US$8.90 a bushel.

Soy products, meanwhile, ended weaker on Friday with active November soy 13 3/4 cents down at US$9.40 1/2 a bushel and December soymeal futures closing US$6.30 weaker at US$259.40 per short tonne.