October 17, 2008

 

Argentina grains down sharply on-week in line with CBOT free-fall

    

 

Argentine grain prices posted sharp losses on the week at the Rosario Grain Exchange Thursday (October 16) due to the free-fall in international commodity prices spurred by the financial crisis.

 

"Declining stock markets and oil carried over to commodities, which aren't finding support based on any fundamentals," the Rosario Grain Exchange said.

 

"Liquidations were seen again due to investor flight from risk and liquidity needs," the Exchange said.

 

However, trade volume was very low as sellers are hesitant to unload their stocks due to the low offers coming in.

 

In addition, local prices have been somewhat shielded from volatility at the Chicago Board of Trade due to a host of local factors.

 

Local soy prices have remained relatively firm as farmers continue to retain the beans, corn exports are closed so values are moving based on domestic demand and wheat prices are finding support due to a drought which is expected to sharply cut Argentine production this year, said Rosario Grain Exchange analyst Lorena D' Angelo.

 

The Agriculture Secretariat made its first forecast for 2008-09 wheat output Thursday, pegging the crop at 9.5 million to 11 million metric tonnes, down sharply from the 16 million tonnes grown last year.

 

With corn exports shut, prices varied widely depending on the origin and destination of each deal, Roagro brokerage analyst Pedro Amuchástegui wrote in an e-mail commentary.

 

Spot corn closed at ARS260 (US$81.12) a tonne in Rosario Thursday, down from ARS300 a week ago. December corn was sold to an exporter for ARS280.

 

April 2009 corn wasn't priced last week, but was traded at US$113 per tonne at the Buenos Aires Exchange Thursday.

 

Wheat prices also varied widely Thursday depending on quality and destination, Amuchástegui said, but closed at ARS440 a tonne in Rosario, down from ARS500 a week ago.

 

December wheat was priced at US$130 per tonne, down from US$155 a week ago.

 

Spot soy was traded at between ARS700 and ARS710 per tonne Thursday, down from ARS780 a week ago.

 

May 2009 soy were priced at US$215 a ton at the Buenos Aires Exchange, down from US$237.30 a week ago.