December 7, 2007

 

Argentine wheat, soy prices fall on government intervention
 

 

Argentine wheat and soy prices were generally lower on the week at the Rosario Grain Exchange on Thursday (December 6, 2007) as a pair of government interventions in the markets weighed on prices, according to analysts. 

 

Wheat prices fell on news that government would keep the export registry closed through the month.

 

On Monday, Argentina extended the closure of the wheat export registry by another 15 working days. Last Wednesday, the government closed the registry for five days in order to study the damage to the new crop from recent frosts.

 

Spot wheat sold for US$172.52 per tonne Thursday, down from ARS590 a week ago.

 

January 2008 wheat closed at US$177 per tonne, down from US$190 a week ago.

 

As of November 29, exporters had declared more than 7 million tonnes of 2007-08 wheat for export, according to the Agriculture Secretariat.

 

About 11 million tonnes of wheat are expected to be available for export from the new crop, according to the US Department of Agriculture. 

 

Soy prices slid on "uncertainty over the possible change in the tax regime which would require the previous purchase of merchandise in the domestic market," the Rosario Grain Exchange said.

 

Argentina's House of Representatives voted Tuesday to invalidate grain export declarations made prior to a recent increase in the export tax when the exporters can't show they had already bought the goods.

 

The bill, which now passes to the Senate for debate, aims to prevent exporters from avoiding higher export taxes in place when they actually ship the goods.

 

Exporters raced to declare export commitments last month and lock in a tax rate amid speculation the government was poised to raise the export tax on soy products and other grains.

 

On November 7, the government raised the export tax on soy to 35 percent from 27.5 percent and the tax on soyoil to 32 percent from 24 percent. Wheat export taxes were raised to 28 percent from 20 percent, while the tax on corn rose to 25 percent from 20 percent.

 

Offers for May 2008 soy were made at US$235 per tonne, down from US$257 last week, but sellers refused to hand over the beans at that price, the exchange said. 

 

Spot corn was traded at US$102 per tonne, down from US$106 a week ago.

 

April 2008 corn sold at US$125 per tonne, up from US$122 last Thursday.