March 17, 2008

 

US corn, soy exports sluggish on cheaper South American supplies

 

 

US export sales for corn and soy were relatively slow due to cheaper prices of South American exports, as Argentina and Brazil harvest new crop.

 

Export demand has not improved even with the US dollar hitting a record low against the euro at US$1.569.

 

After dominating the global markets for months, US corn is slowly overshadowed by Argentine corn.

 

Even the US$15 per tonne freight advantage of US corn has been eroded by cheaper prices in Argentina.

 

US corn for April shipment was offered at 45 cents a bushel premium to CBOT May FOB Gulf, while Argentine corn was offered at 5 cents discount.

 

Meanwhile, US wheat export sales also dropped sharply this week as prices for both hard and soft varieties rose more than US$30 per tonne amid soaring futures prices, traders said Friday.

 

Wheat futures rallied through Wednesday following the release of bullish ending stocks estimates from the USDA, but the market turned lower the last two sessions on profit-taking and forecasts for good crop weather.

 

US wheat has become one of the most expensive varieties in the world, even for the new crop that will be harvested in June. Markets like Jordan, Turkey and Morocco were expected to be won by Europe or countries in the Black Sea region.

 

Only Iraq was expected to buy US wheat due to its political ties rather than economic reasons, traders said. Iraq's tender closes on Saturday, with bids to remain valid until March 20.

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