January 30, 2006

 

Argentina's corn and soy prices ended higher

 

 

Argentina's cash corn and soybean prices all closed higher Thursday from a week ago, led upward by recent gains in grain and oilseed futures at the CBOT, traders said.

 

Soybeans sold for 535 peso (US$175) per tonnes Thursday at the Rosario Cereals Exchange, up from 520 peso a week ago.

 

The Rosario Exchange is Argentina's top cash soybean market.

 

"Prices in the local market once again rose in sync with the behaviour of (futures at the CBOT)," the Exchange's Economic Studies Institute said in an email Thursday. "Futures in Chicago closed higher because of fund buying and positive news about export sales."

 

Around 10,000 tonnes of soybeans were sold Thursday in Rosario, compared with 8,000 tonnes a week earlier. Soybean exporters made no offers Thursday, meaning all of the soybeans sold went to local crushers, the Exchange said.

 

May soy futures sold for US$164, up from US$161.6/tonnes a week ago.

 

As of Saturday farmers have planted 97.3 percent of the 2005/06 soybean crop, according to the Buenos Aires Cereals Exchange.

 

The USDA has forecast Argentina's 2005/06 soybean crop at a record 40.5 million tonnes.

 

As of Jan 24, Argentina had sold 10 million tonnes of 2004/05 soybeans for export, local Agriculture Secretariat data show. Sales of 2005/06 soybeans totalled 1.594 million tonnes by the same date.

 

 

Corn

 

Cash corn sold for about 255 peso/tonne Thursday in Rosario, up from 237 peso/tonne a week ago.

 

"This crop is also following a positive trend," the Economic Studies Institute said. "Some exporters are showing themselves to be in need of grain and this adds to the positive trends seen (at the CBOT)."

 

About 7,000 tonnes of corn were sold Thursday in Rosario, compared with 6,000 tonnes a week ago.

 

Argentina's domestic demand is up this year because of the need for feed from the country's expanding beef and poultry industries. Meanwhile, production is seen down measurably for 2005/06, which is putting pressure on prices.

 

"This combination of lower output and higher demand is leading prices higher," said Mircoli. "The decline in output can really be felt in Bahia Blanca (located in south-eastern Buenos Aires Province) and there we're corn trading for US$90/tonne. It's because that area was really hit by the drought."

 

At least one trader offered US$81/tonne for February-March 2005/06 futures, up from US$77 a week ago.

 

Farmers had sown 97.3 percent of the 2005/06 corn crop by Saturday, according to the Buenos Aires Exchange.

 

The USDA has forecast Argentina's 2005/06 corn output at 16.8 million tonnes. But local analysts say that forecast is way too high. The Argentine Corn Association, or Maizar, says production will total 14 million tonnes in 2005/06 and the Agriculture Secretariat has put production at between 13 million and 14 million tonnes.

 

Last season good weather and solid prices led farmers to harvest a record 19.5 million tonnes of corn, according to the USDA. The Agriculture Secretariat says output last season totalled a record 20 million tonnes.