October 15, 2007

 

Mexico Cash Grains: Trade halted as US prices continue to rise

 

 

Physical trading came close to a halt this week in the Mexican cash grains markets as US prices for imported grains continued to rise and locals were watching out for potential speculation, traders said Friday (October 12).

 

With US wheat and soy prices trading at levels near unprecedented highs, traders and importers in Mexico said they were expecting that prices for locally produced corn soon would start rising again.

 

"We haven't seen any trade, people are a bit scared of where this will go, and it's hard to decide on what to offer with this level of speculation," said one Mexican trader from the country's northern grains belt.

 

Another Mexican trader said that local corn producers and brokers were still holding on to stocks from the recently completed white corn harvest in northern Sinaloa, hoping for the speculation to pay off in higher prices.

 

"There is still a lot of corn around from the Sinaloa harvest, but people haven't been to anxious to sell, they want to see where prices are going and the feeling is that they will continue to rise," he said.

 

Traders were also starting to take an interest in the spring-summer white corn harvest in the central part of Mexico which is known as the "Bahio region," primarily comprising of the crops from Jalisco and Guanajuato states.

 

Harvesting of the Bahio crop normally starts during the second half of October and the harvest is Mexico's second most important after the Sinaloa harvest. There have been no reports of weather problems, and the forecasts call for a stable Bahio crop of about 3 million tonnes.

 

Corn and wheat futures closed mixed Friday at the Chicago Board of Trade, with active December corn closing 7 1/4 cents higher at US$3.51 cents per bushel while December wheat settled down 25 1/2 cents at US$8.57 1/2 a bushel.

 

Soy products, meanwhile, also ended mixed on Friday with active November soy down 4 3/4 cents at US$9.76 3/4 a bushel but December soymeal futures US$0.80 higher at US$278.90 per short tonne.