November 24, 2006

 

Argentina wheat trade resumes on government plan

 

 

Spot wheat was priced at the Rosario Cereals Exchange Thursday (Nov 23) for the first time in nearly three weeks.

 

Trade had been frozen on uncertainty surrounding an expected government intervention to keep down domestic prices in an attempt to control bread prices, an important component of the inflation index.

 

This week the Secretary of Agriculture announced a plan to require exporters to sell one half of a tonne of discounted wheat to millers for every tonne that they export.

 

The proposal was sent to the Economy Ministry for review and a decision is expected within the next days, according to the Agriculture Secretariat.

 

Spot wheat was quoted at ARS380 (US$123.74) at the Rosario Cereals Exchange Thursday.

 

December wheat traded at US$127.00 up from US$122.90 last week.

 

Some 9,000 tonnes of new crop wheat was traded, according to Roagro Analyst Javier Cabanellas.

 

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

 

Cash corn sold for ARS390 per tonne Thursday in Rosario, unchanged from a week ago. April 2007 futures were also unchanged at US$115 per tonne.

 

The Agriculture Secretariat closed the registry for new crop export declarations Monday to review a recent surge in declarations.

 

Exporters had declared some 3.5 million tonnes of new crop exports over the past two weeks.

 

The temporary closure is not expected to affect exports, as the new crop does not come in until April 2007, the Secretary of Agriculture Miguel Campos said when announcing the closure.

 

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 tonnes of corn during 2006-07.

 

Soy prices continued recent gains Thursday due to solid demand from exporters and processors, according to a market commentary. 

 

Cash soys sold for ARS613 per tonne Thursday, up from ARS590 a week ago. May 2007 soys closed at US$192 per tonne, up from US$189 a week ago.

 

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

 

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