January 14, 2005

 

 

Argentina's Corn, Soy Prices Down; Wheat Stable From Week Ago

 

Argentina's cash corn and soybean prices fell from a week ago as expectations for solid harvests and larger global stocks of both crops pushed values lower, traders said.

 

Cash soybeans sold for ARS455 ($1=ARS2.935) per metric ton Thursday in Rosario, where almost all of Argentina's cash beans are sold.

 

Soybeans sold for ARS470 a week ago.

 

Soybean prices tumbled both here and in Chicago Wednesday after the U.S. Department of Agriculture issued a report that solidified expectations for a strong supply of corn and soybeans.

 

Somewhere between 3,000 and 4,000 tons of cash soybeans were sold Thursday in Rosario, the Rosario Cereals Exchange estimated. Meanwhile, future 2004-05 soybean prices fell $2 from the previous day, ending up at around $142 a ton.

 

Cash prices had been as high as ARS480 over the past week, sustained largely because of big demand from Bunge, traders said.

 

As of January 11, Argentina had sold 6.63 million tons of 2003-04 soybeans and 227,550 tons of 2004-05 soybeans, the latest Agriculture Secretariat data show. This compared with 8.85 million tons of soy sold in the same period in 2003, most of this to China.

 

As of Friday, farmers had planted 94% the 2004-05 soy crop, according to the Secretariat, which sees area at 14.2 million hectares.

 

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 ARS175 per ton Thursday in Rosario, down from ARS190 per ton from a week ago.

 

About 5,000 tons of corn where sold Thursday in Rosario, the exchange said.

 

"The USDA report showed corn stocks up and prices fell because of that," Frogone said. "Beyond that, local production is very good. Corn could fall even more, and with 20% in export taxes things start to get complicated for producers."

 

Others traders have agreed, with one source commenting that current low futures prices could decline even further. 

 

"Along with a major exporter, we did a study of the crop and we forecast that March futures are likely to be around $50 per ton, just catastrophic," said the trader.

 

On Thursday March corn sold for $57/ton. Around 3,000 to 4,000 tons of corn futures were sold Thursday in Rosario.

 

As of January 11, Argentina had sold an estimated 10.5 million tons of 2003-04 corn, secretariat data show, compared with 11.3 million tons in the same period in 2003. Sales of 2004-05 corn totaled 361,547 tons.

 

The Buenos Aires Cereals Exchange has pegged 2003-04 corn production at 13.1 million tons and expects 2004-05 output to reach 17 million tons.

 

The USDA this week raised its forecast for 2004-05 output to 17 million tons, up from 15.5 previously.

 

As of Friday, farmers had planted 95% the 2004-05 corn crop, according to the secretariat, which sees area at 3.3 million hectares.

 

Argentina is the world's No. 2 corn exporter, selling about 70% of its production overseas.

 

WHEAT

 

Unlike the other cash crops, wheat prices have remained stable in recent weeks, hovering around ARS250/ton.

 

Wheat sold for about ARS247 per ton in Rosario Thursday, down from ARS250 from the previous week.

 

"There's a lot more wheat than was previously thought," said Frogone. "Some are expecting 2004-05 production to total 16 million tons, but others, who think more optimistically, believe production could reach 17 million tons. It'll be hard for Argentine wheat to rise. It could fall."

 

Traders estimated that 10,000 tons of wheat were sold Thursday in Rosario.

 

As of January 11, Argentina had sold an estimated 9.8 million tons of 2003- 04 wheat, the latest Agriculture Secretariat data show. Around 3.3 million tons of 2004-05 wheat had been sold by this date. By this time in 2003, Argentina had sold around 6.2 million tons of 2002-03 wheat.

 

The Buenos Aires Exchange puts 2004-05 production at 16.35 million tons and the U.S. Department of Agriculture sees it at 16 million. According to the Agriculture Secretariat, Argentina produced 14.5 million tons of wheat in the 2003-04 season.

 

As of Friday, farmers had collected 93% of the 2004-05 wheat crop, according to the secretariat.