February 20, 2009

Argentine soy prices were down on the week Thursday (February 19) as showers across the farm belt brought some relief from a severe drought.

 

Soy prices fell at the Rosario Grain Exchange "due to the better perspectives for the crop after the weather improved," the exchange said.

 

The showers led the Agriculture Secretariat to raise its forecast Wednesday to 17 million hectares (42 million acres), up from 16.5 million hectares forecast last month.

 

The recent rainfall helped farmers complete late planting and "generated good expectations for future yields," the Secretary said in its monthly crop report.

 

The crop had been struggling due to severe drought across the farm belt, with fears of widespread losses providing a lift to international soy prices.

 

Rainfall in recent days has eased the concerns somewhat, but more moisture is needed over the short term to help the crops recover, the Secretariat said.

 

While the rain was good news, tensions between the government and farmers stepped up a level on Thursday.

 

The leaders of Argentina's four top farm groups announced a four-day strike ahead of talks with the government slated for Tuesday.

 

There had been expectations that the government's offer on Thursday of talks would prevent the strike, but the farm leaders announced a stoppage of grain and meat sales, anyway, just an hour after confirmation of the meeting with Minister of Production Debora Giorgi next week.

 

Farmers chafe at the high tax burden they bear and government policies designed to shield local consumers from rising food prices.

 

The farmers launched a series of crippling strikes and roadblocks over four months last year to protest export taxes on grains, limits on grain and beef exports, and other government intervention in agricultural markets.

 

The strikes shut down shipments from Argentina, one of the world's leading grain exporters, and caused food shortages in the cities.

 

Spot soy was traded at ARS780 (US$220.71) per tonne at the Rosario Grain Exchange Thursday, down from ARS930 a week ago.

 

May soy were priced at US$215 per tonne, down from US$235 a week ago.

 

Spot corn traded at ARS390 a tonne at the Rosario Grain Exchange Thursday, down from ARS410 a week ago.

 

April 2009 corn sold at US$116 per tonne, down from US$120.

 

Spot wheat was traded at ARS370 per tonne in Rosario on Thursday, unchanged from a week ago.

 

Volume totalled just 3,000 tonnes Thursday due to weak demand from exporters, the exchange said.