February 13, 2009
Argentina corn, soy prices rose on demand, drought concerns
Corn and soy prices rose this week in Argentina, with demand from exporters driving up corn prices by 2.5 percent compared with a week earlier.
Exporters stepped up orders for corn after the government on Wednesday authorized exports of more than 6 million tonnes of the new crop, the Rosario Grain Exchange said Thursday.
This led to a surge in offers from exporters "looking to capture product," it said.
On Wednesday, the agriculture trade office ONCCA said it will permit exports of 6,050,400 tonnes of corn from the 2008-09 crop, suggesting that is the surplus amount that will be available for export after domestic demand is met.
Corn production in Argentina, the world's third-biggest exporter of the crop, is expected to be sharply lower this season due to decreased planted area and low yields.
On Tuesday, the US Department of Agriculture reduced its 2008-09 corn output forecast to 13.5 million tonnes from 16.5 million.
That compares with an estimate of 12.3 million to 13.7 million tonnes by the Buenos Aires Cereals Exchange - and the output of more than 20 million tonnes in the 2007-08 season.
Spot corn traded at ARS410 (US$117.5) a tonne at the Rosario Grain Exchange Thursday, up from ARS400 a week ago. Traded volume was estimated at 10,000 tonnes. April 2009 corn sold at US$120 per tonne, down from US$121.
Soy prices rose on concerns a drought in Argentina and Brazil will reduce supplies, the exchange said.
While rains fell this week in Argentina, more moisture is needed to improve crop yields and production, said Fernando Botta, managing director of the Rosario grain brokerage Agrobrokers.
On Tuesday, the USDA cut its estimate of 2008-09 soy production to 43.8 million tonnes from a previous forecast of 49.5 million tonnes on the drought's impact on harvested area and yields.
Argentina is the world's third-biggest exporter of soy and No. 1 exporter of soymeal and soyoil.
Spot soy was traded at ARS930 per tonne at the Rosario Grain Exchange Thursday, up from ARS910 a week ago. Traded volume was estimated at 6,000 tonnes.
May soy were priced at US$235 per tonne, down from US$240 a week earlier.
Wheat closed at ARS370 per tonne Thursday, with strong demand from exporters after ONCCA said it will allow 520,056 tonnes of wheat for export.
"This brought exporters into the market," the Rosario Exchange said.
That compares with prices of ARS390 per tonne for delivery in Rosario and ARS370 in San Lorenzo a week earlier.
On Tuesday, the USDA cut its estimate for 2008-09 wheat production to 8.4 million tonnes from a previous estimate of 9.5 million.
The estimate is sharply lower than the 16 million tonnes grown last season, due to decreased planted area and drought damage.