November 17, 2006

 

Argentina wheat trade frozen; corn, soy follow CBOT

 

 

Argentine spot wheat trading remained frozen for the second straight week on Thursday (Nov 16), while corn gained and soy fell slightly compared to a week ago, following similar moves in Chicago over the past seven days, according to analysts.

 

Producers have refused to sell their wheat to exporters and millers due to artificially low wheat prices imposed by the government to contain domestic inflation.

 

Although unconfirmed, analysts believe that exporters made an agreement with the government not to pay over ARS370 (US$120.52) per tonne for old-crop wheat. The government is seeking to tap inflationary pressure in domestic bread prices and has granted a number of tax breaks to millers in recent weeks.

 

However, producers complain that they are being unfairly burdened by the government's price controls.

 

Wheat was not priced at the Rosario Cereals Exchange on Thursday.

 

However, December wheat traded at US$122.90 at the Buenos Aires Cereals Exchange on Thursday, down 0.72 percent from on Wednesday.

 

Argentina is expected to produce 13.6 million tonnes of wheat in 2006/07, according to the Agriculture Secretariat.

 

 

Corn

 

Cash corn sold for ARS390 per tonne Thursday in Rosario, up from ARS385 a week ago. April 2007 futures rose to US$115 per tonne compared with US$112 a week ago.

 

Corn futures have been following Chicago, Roagro Analyst Pedro Amuchastegui said in an email market commentary.

 

Just 2,000 tonnes of spot corn was traded Thursday, according to the Rosario Cereals Exchange. April corn volume reached 20,000 tonnes.

 

Argentina will plant an estimated 3.3 million hectares with corn during the 2006/07 crop cycle, up 3 percent from 3.18 million in 2005/06, according to the Agriculture Secretariat.

 

The US Department of Agriculture estimates that Argentina will produce 17.5 million metric tonnes of corn during 2006/07.

 

 

Soy

 

Local soy prices continue to mirror movements in Chicago, according to the Rosario Cereals Exchange daily market commentary.

 

Cash soybeans sold for ARS590 per tonne Thursday, down from ARS595 a week ago. May 2007 soybeans closed at US$189 per tonne, unchanged from a week ago.

 

Spot volume was very low, while 5,000 tonnes of new-crop soybeans were traded, according to the Exchange.

 

The Agriculture Secretariat forecasts that a record 15.9 million hectares will be planted with soy in 2006/07.

 

The USDA estimates that Argentina will produce 41.3 million tonnes of soy from the 2006/07 crop.