December 8, 2006

 

Argentina's soy hits two-year high

 

 

Argentine soy prices hit a two-year high Thursday (Dec 7) on strong demand from processors while grain prices fell on the week due to profit taking in Chicago, analysts said.

 

However, grains trade was muted due to a nationwide farm strike.

 

"The week ended with little activity due to the farm strike," Roagro analyst Carlos Boglioli said in an e-mail market commentary.

 

On Sunday, Argentine farm groups launched a strike in protest of government intervention in agricultural markets designed to keep domestic food prices down. The strike is expected to last through Dec 11.

 

 

Wheat

 

Spot wheat closed at ARS370 at the Rosario Cereals Exchange Thursday, down from ARS380 last week. December wheat traded at US$122 down from US$130.00 last week.

 

Prices were down on "weak buyer interest and pressure from improved climatic conditions which were aiding the harvest," according to the Rosario Cereals Exchange.

 

Spot wheat trade volume was 2,000 tonnes, the Exchange said.

 

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

 

 

Corn

 

There was only one buyer of spot wheat Thursday, with only 600 tonnes traded, according to the Exchange.

 

Cash corn sold for ARS380 per tonne Thursday, down from ARS400 a week ago. April 2007 futures fell to US$118 compared with US$123 per tonne last week.

 

Argentina will plant an estimated 3.3 million hectares with corn during the 2006/07 crop cycle, up 3 percent from 3.18 million hectares 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

 

Demand was centred on soy, with prices reaching their highest point since May 2004.

 

Some 30,000 tonnes of the oilseed were traded on the spot market, according to the Exchange.

 

Cash soybeans sold for ARS630 per tonne Thursday, up from ARS620 a week ago. May 2007 soybeans closed at US$193 per tonne, down from US$199 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 will produce 41.3 million tonnes of soy from the 2006/07 crop.