June 12, 2009
Argentina corn prices jump on talk of purchase-price deal
Argentine grain prices extended recent gains again this week, with corn leading the pack Thursday (Jun 11) amid speculation that the government would make a deal with exporters to purchase corn at values higher than current local market price.
Exporters bought spot corn at prices between 420 Argentine pesos and ARS450 per tonne Thursday, up from ARS390 to ARS400 a week ago.
March 2010 corn traded at between US$125 and US$130 a tonne, up from US$120 a week ago.
Exporters came out fast and early to buy corn amid talk of an agreement similar to a wheat accord reached last month, the Rosario Grain Exchange said.
On May 4, President Cristina Fernandez announced a deal under which exporters agreed to buy one million tonnes of old crop wheat at full price, which is the theoretical Free-Alongside-Ship price minus the 23 percent export tax. Exporters will then have to sell that wheat back to local millers at market price. In exchange, the exporters will be guaranteed one million tonnes of 2009-10 wheat available for export.
Local wheat prices jumped more than 20 percent following the agreement, with exporters back in the long-dormant wheat market. The plan is designed to stimulate more wheat planting in the face of signs that 2009-10 production will be down sharply due to drought.
Argentina's 2009-10 wheat planting will plunge to just 3.2 million hectares, down 30 percent on the year and the smallest amount planted since records have been kept, according to the Buenos Aires Cereals Exchange.
Spot wheat traded at ARS611 per tonne Thursday, up from ARS608 a week ago.
December 2009 wheat traded at US$150 a tonne on Thursday, unchanged from last week.
Local and international soy prices continue to find support from low stocks in the US and the slow planting pace there, the Rosario Exchange said.
Spot soy were traded between ARS1,055 and ARS1,080 per tonne at the Rosario Grain Exchange Thursday, up from between ARS1,025 and ARS1,040 a week ago.
May 2010 soy futures traded at US$240 a tonne in Rosario Thursday, unchanged from a week ago.
With virtually all of the harvest complete, Argentina's 2008-09 soy crop totals just 32 million tonnes, according to the Buenos Aires Cereals Exchange.
Early in the season, analysts had expected output to approach 50 million tonnes, but drought caused yields to fall sharply.
US$1 = ARS3.75592 (Jun 12)
