December 15, 2006

 

Argentina's soy prices higher on strong demand

 

 

Argentina's soy prices rose Thursday (Dec 14) on strong demand from crushers, analysts said.

 

"There isn't much soy left from the old crop and crushers are competing to ensure that they have sufficient supplies before the new crop comes in," Granar analyst Esteban Suaya said.

 

Just 3-4.5 million tonnes of 2005/06 soy remain available for sale, Suaya said. The new crop will start to come to market in March.

 

Cash soybeans sold for ARS640 (US$209.32) per tonne Thursday, up from ARS630 a week ago. May 2007 soybeans closed at US$193 per tonne, down from US$193 a week ago.

 

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

 

The US Department of Agriculture estimates that Argentina will produce 42 million tonnes of soy from the 2006/07 crop.

 

 

Wheat

 

Very little wheat was traded Thursday with the shadow of government intervention hanging over the market, Suaya said.

 

The government is considering measures to control domestic wheat prices in efforts to prevent inflation in bread.

 

There is pressure to keep prices at ARS370-375, Suaya said.

 

Spot wheat closed at ARS380 at the Rosario Cereals Exchange Thursday, up from ARS70 last week. January wheat traded at US$122.60, up slightly from US$122 last week.

 

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

 

The USDA is expecting 14.2 million tonnes of wheat from the 2006/07 crop.

 

 

Corn

 

Corn trade was also subdued due to expectations that the government would intervene to keep down corn prices, which affect pork, poultry and dairy production costs, Suaya said. Corn is the principal feed used for production by these sectors.

 

Cash corn sold for ARS380 per tonne Thursday, unchanged from a week ago. April 2007 futures rose to US$121 compared with US$118 per tonne last week.

 

There are very few sellers as not much of the old crop remains and the government is applying pressure to keep prices under ARS380-ARS385, Suaya said.

 

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

 

The USDA estimates that Argentina will produce 19 million tonnes of corn during 2006/07.