March 5, 2004

Argentina Corn, Soy, Wheat Prices Fall

Argentine corn, soybean and wheat prices all closed lower on Thursday compared with prices from a week ago, traders said.
 
Soybean prices exceed declines at the Chicago Board of Trade.
 
Beans for immediately delivery sold for 660 pesos ($1=ARS2.924) per metric ton on Thursday in Rosario, Argentina's main soybean port.
 
This is down from 700 pesos on Tuesday and 670 pesos a week earlier.
 
"Prices fell after they declined in Chicago, but lately for every dollar drop you see in Chicago, it seems like prices fall two dollars here," said Santiago Castresana, a trader with the Buenos Aires-based brokerage Granos del Parana.
 
New-crop soybeans for delivery in May sold for $218 (futures prices are normally quoted in dollars) in Rosario.
 
Prices declined despite a potentially damaging lack of rain in key soybean-producing regions this week.
 
The drought could push 2003-04 production down to 34 million tons, the consulting firm Agropuerto said Wednesday. This would take output down from 34.8 million tons last year and down even further from the U.S. Department of Agriculture's current estimate of 36.5 million tons.
 
Agriculture Secretariat sources have said unofficially that Argentina will harvest between 35 million and 37 million tons of soy in 2003-04.
 
Farmers have finished planting the 2003-04 soybean crop, according to the Agriculture Secretariat. Area totaled at a better-than-expected 13.95 million hectares, compared with 12.6 million a year ago.
 
Argentina is the world's No. 3 soy producer, behind Brazil and the U.S. Most of Argentina's soybean production is converted into meal and oil, making it the No. 1 exporter of these products.
 
Soybeans represent about 50% of total grain and oilseed production and have become by far Argentina's most important crop.
 
Annual soybean exports are expected to rise 24.4% in 2004, newspaper Clarin reported Thursday, citing an unpublished Secretariat document.
 
Soyoil exports are seen up 6.4% and soymeal shipments up another 6% compared with last year.
 
Sales from these exports alone will likely total $9.15 billion in 2004.
 
CORN
 
Corn sold for 235 pesos per ton on Thursday in Rosario, down from 245 the previous week.
 
"Exporters are loading up on cheap corn now," but demand is still not strong enough to lift prices, said Castresana.
 
Last week, farmers finished planting the 2003-04 corn crop, according to the Agriculture Secretariat. According to the Buenos Aires Cereals Exchange, farmers had already harvested 8.7% of the crop by Saturday.
 
The Secretariat has estimated 2003-04 corn output at 12.1 million metric tons while the exchange has put production at 12.8 million tons.
 
Argentina produced about 15 million metric tons of corn in 2002-03, according to the Secretariat.
 
The USDA has forecast 2003-04 corn production at 12.5 million tons.
 
In 2003, Argentina was the No. 3 exporter of corn, behind China and the U.S. However, Argentina is expected to recover the No. 2 spot in 2004 as China consumes more of its own production and ceases to export as much.
 
Argentina will likely export around 11 million tons of 2003-04 corn, according to a report released in January by the Rosario Cereals Exchange.
 
WHEAT
 
Wheat for immediate delivery sold for 335 pesos per ton in Rosario, down a bit from 340 pesos a week ago.
 
Local wheat prices are less influenced by Chicago than are corn and soybeans prices, traders say.
 
"Prices here are more influenced by South American demand; that is, demand from within Mercosur," said Castresana. "They will probably pick up once we see stronger demand from Brazil."
 
Brazil buys the vast bulk of Argentine wheat each year. Analysts expect Brazil to buy at a faster clip toward the end of this month.
 
The Agriculture Secretariat has forecast 2003-04 wheat production at 14 million metric tons, up from last month's estimate of 13.2 million tons.
 
Last year, output totaled 12.3 million tons.
 
The Buenos Aires Cereals Exchange estimates production at 13.7 million tons, compared with 12.16 million tons, according to exchange data.
 
The USDA has forecast total output at 13.5 million tons.