December 23, 2004
Argentina's Grain Prices Little Changed From Week Ago
Argentina's cash grain and oilseed prices closed Wednesday with little variation from a week earlier, traders said.
"There really isn't much news to change prices," said Federico Mircoli, a trader and analyst with the Buenos Aires-based brokerage Granos del Parana. "Prices have changed very little over the past two weeks. These are probably floor prices."
Cash soybeans sold for ARS470 ($1=ARS2.964) per metric ton Wednesday in Rosario, where practically all the country's cash beans are traded. That price is down slightly from ARS475 a week ago.
Mircoli said that market rumours were circulating that Asian soybean rust had been found in the province of Santa Fe, but prices have remained unaffected.
Asian rust has been found in two northern provinces, though neither is a major producer like Santa Fe, which is home to a huge portion of production.
"Soybean prices are going to depend a lot on how the South American crop evolves," Mircoli said. "It is developing normally now, but if yields go down because of the rust, then prices could go up."
As of Dec. 20, Argentina had sold 6.55 million tons of 2003-04 soybeans and 161,150 tons of 2004-05 soybeans, the latest Agriculture Secretariat data show. By last year at this time, Argentina had sold 8.56 million tons of soy, most of this to China.
Farmers had planted 82% the 2004-05 soy crop as of Friday, according to the Agriculture Secretariat.
The U.S. Department of Agriculture has estimated Argentina's 2004-05 soybean production at 39 million tons.
Argentina produced 32 million tons of soybeans in 2003-04, according to the Secretariat.
CORN
Cash corn sold for ARS205 per ton Wednesday in Rosario, a tad up from ARS200 the previous week.
"An excellent corn crop here and in the U.S. is pressuring prices to stay at these levels," Mircoli said. "You'll expect to see higher demand from the feedlot industry, but for now prices are not affected."
Most of Argentina's beef comes from grass-fed cattle, but more animals are being fattened via the feedlot system. Moreover, poultry production is expanding. Analysts say this will lead to higher demand for corn as feed.
This, combined with solid demand from abroad, should push prices up in the medium term, analysts say. Argentina is the No. 2 corn exporter.
As of Dec. 20, Argentina had sold an estimated 10.07 million tons of 2003- 04 corn, Secretariat data show. By this time last year Argentina had sold 11.3 million tons of 2002-03 corn. Sales of 2004-05 corn totaled 158,000 tons.
The Buenos Aires Cereals Exchange has pegged 2003-04 output at 13.1 million tons. The USDA sees 2004-05 output at 15.5 million tons.
As of Friday, farmers had planted 88% the 2004-05 soy crop, according to the Secretariat, which sees area at 3.2 million hectares.
Argentina exports about 70% of its production.
WHEAT
Wheat sold for ARS255 per ton in Rosario Wednesday, down from ARS252 a week earlier. The national average price was ARS250, Mircoli said.
"I think we could see higher prices after the harvest is completed," he added. "New wheat and old wheat are hitting the market (at the same time) and keeping prices down."
Farmers had collected 44% of the 2004-05 wheat crop as of Friday, according to the Secretariat.
As of Dec. 20, Argentina had sold an estimated 9.73 million tons of 2003- 04 wheat, the latest Agriculture Secretariat data show. About 2.2 million tons of 2004-05 wheat had been sold by this date.
By the same time last year, Argentina had sold 6.2 million tons of 2002- 03 wheat.
The Agriculture Secretariat sees 2004-05 wheat production at 15.1 million tons, up from 14.5 million tons a year ago. In a recent interview with Dow Jones Newswires, Agriculture Secretary Miguel Campos said 2004-05 wheat production could rise to 15.7 million tons if current yields match those from the previous year.
The Buenos Aires Exchange, which sees yields up from a year ago, estimates that 2004-05 production will reach 16.12 million tons. USDA estimates are at 15 million.
