July 6, 2009
Argentina grain exchange empty on AH1N1 fears; soy slips
The trading floor of the Rosario Grain Exchange was empty Thursday (Jul 2) as live trading was suspended due to emergency measures against the AH1N1 flu, but traders called in offers that saw soy prices down slightly on the week.
Spot soy was traded at between ARS1,005 and ARS1,030 a tonne in Rosario Thursday, down from between ARS1,015 and ARS1,035 a week ago.
May 2010 soy futures traded at US$225 to US$227 a tonne, down from US$228 from a week ago.
Meanwhile, spot wheat and corn weren't traded for the second week running as sellers wait for exporters to come in with the new, higher prices agreed upon with the government.
Spot corn was last traded at ARS435 per tonne at the Rosario Grain Exchange on June 17.
Corn futures weren't traded either on Thursday.
Trade stalled as exporters are hesitant to buy at the government's set price and farmers refused to sell at a lower price, the Rosario Exchange said.
On June 16, Argentina's grain exporters reached a deal with the government to buy up to three million tonnes of 2009-10 corn and an additional one million tonnes of new crop wheat at a theoretical price set by the government. In exchange, the exporters will be assured export permits for the surplus wheat and corn from the 2009-10 crop.
On Thursday, the government's theoretical price that farmers should receive for spot corn was set at ARS467 per tonne. That theoretical Free-Alongside-Ship price is the Free-On-Board price minus export taxes.
The new deal is expected to boost local corn prices, which have been trading at a discount due to a risk premium because of the government's intermittent closing of exports.
Still, stocks of wheat and corn over domestic demand will have to be confirmed by the agricultural trade office, or ONCCA, before the exports will be approved. The deal will start with exporters buying one million tonnes of corn, at which time the government will consider extending the deal for the additional two million tonnes.
The agreement follows a similar deal struck in May for one million tonnes of 2009-10 wheat exports.
The government hopes the new agreement will stimulate wheat and corn planting this season amid signs that the area planted with the crops will fall sharply as farmers continue a major shift to soy.
Spot wheat was last traded at ARS654 on June 18.
US$1 = ARS3.80674 (Jul 3)
