April 2, 2004

Argentina Wheat Prices Down

Argentina wheat prices closed lower compared to a week ago. Wheat for immediate delivery sold for ARS342/ton in Rosario, down from ARS358 a week ago.
 
Carryover stocks of 1.4 million tons from 2002-03, as well as higher-than- expected production this year, are keeping prices down, according to Lorena D'Angelo, an analyst at the Rosario exchange's Institute of Economic Studies.
 
All told, Argentina's exportable wheat stocks are up about 40% from a year ago, the Rosario exchange said in a report Monday.
 
Demand from new markets has kept prices from falling markedly. In recent weeks Argentina has seen demand from new buyers such as Algeria, Kenya, Lebanon, Libya and Ukraine.
 
As of Friday, for example, Algeria had bought 275,000 tons of 2003-04 Argentine wheat, according to Secretariat data.
 
Algeria bought no Argentine wheat in 2003.
 
Moreover, in mid-April Algeria will accept bids from exporters for another 50,000 tons of wheat, according to the Rosario exchange.
 
French exporters hope to win the bidding, but they "fear strong competition from Argentina," the exchange said.
 
Last month, the Secretariat raised its forecast for 2003-04 wheat production to 14.5 million tons, up from 14 million previously.
 
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.