March 12, 2004



Argentina's Corn, Soy, Wheat Prices Little Changed From Week Ago

Argentina's corn, soybean and wheat prices were little changed Thursday compared with a week ago, traders said.
Local prices basically mirrored the fluctuating prices at the Chicago Board of Trade, the Rosario Cereals Exchange said in its daily commentary.
Soybeans for immediately delivery sold for 670 pesos ($1=ARS2.913) per metric ton Thursday in Rosario, Argentina's main soybean port, up slightly from ARS660 a week earlier.
New crop soybeans for delivery in May sold for $228 in Rosario, up $10 from a week ago.
Around 10,000 tons of cash soybeans and 16,000 tons of future beans were sold in Rosario Thursday, according to the Rosario exchange.
As farmers begin harvesting the 2003-04 soybean crop, cash and futures prices are merging, with cash prices costing only $1 more than futures.
As of Saturday, farmers had collected only around 1% of the new soybean crop. But the crop appears to be in good shape and is developing well despite recent concerns about drought-like conditions in South America, analysts say.
"The climatic conditions in the country continue to be mainly favorable for soybeans and corn," the exchange said Thursday.
Moreover, conditions are good enough to virtually guarantee output from this year's soybean crop will surpass that of the previous year, according to Cesar Rebella, director of the National Institute of Climate and Water, or INTA.
"This year's production will surely surpass that of the previous year," Rebella said. "A recent cycle of rain, especially rain from this past weekend, has helped to repair the crop from any damage suffered because of the drought."
Argentina produced a record 34.8 million tons of soybeans last year, according to the Agriculture Secretariat. Estimates for 2003-04 output range from a pessimistic 34 million tons to an optimistic 36.5 million. Unofficially, Secretariat sources say production will total between 35 million and 37 million tons this year.
Irrespective of the final outcome, planted area for 2003-04 soybeans is already up measurably from a year ago, according to all estimates.
The Secretariat has put area at 13.957 million hectares compared with 12.6 million a year ago. And the Buenos Aires Cereals Exchange has forecast area at 14.4 million hectares, compared with 12.8 million a year earlier.
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.
Higher soybeans prices and better values in Chicago helped to lift local corn prices Thursday, traders said. Corn sold for ARS240/ton Thursday in Rosario, up a hair from ARS235 the previous week.
Roughly 20,000 tons of corn traded hands Thursday in Rosario, according to exchange estimates.
Future corn for delivery in April sold for $83 Thursday.
As of Saturday, farmers had finished collecting 10% the 2003-04 corn crop, according to the Agriculture Secretariat.
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 lowers exports.
Argentina will likely export around 11 million tons of 2003-04 corn, according to a report in January by the Rosario Cereals Exchange.
Wheat for immediate delivery sold for ARS333/ton in Rosario, down just slightly from ARS335 a week ago.
Local wheat prices are less influenced by Chicago than are corn and soybeans prices, traders say.
Prices should rise somewhat toward the end of the month when, as many analysts expect, Brazil will begin to buy local wheat at a faster pace.
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 has estimated total production about 13.7 million tons in 2004, compared with 12.16 million tons in 2003, according to exchange data. The USDA has forecast total output at 13.5 million tons in 2004.

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