September 26, 2003



Argentina Soy, Corn And Wheat Outlook


Argentine soybean prices closed sharply higher on Thursday after increases at the Chicago Board of Trade translated into gains at the local cereals exchange, traders said.


Soybean prices in Rosario, Argentina's main soy market, closed at around 525 pesos ($1=ARS2.895), up from 505 pesos a week ago. This could be attributed to recent appreciations of the peso against the dollar after Argentina's meeting with the International Monetary Fund this month.


But soybean prices have not risen as much as expected because exporters remain relaxed about purchasing, according to the Rosario Exchange. An estimated 10,000 metric tons of soybeans were sold Thursday in Rosario.


The U.S. Department of Agriculture expects Argentina to produce a record 37 million tons of soybeans in 2003-04, with about 11 million tons for eventual export.


Local analysts have put 2003-04 soybean output at around 36 million tons.




Corn prices were firm at 225 pesos in light trading in Rosario on Thursday, with 2,000 to 3,000 tons changing hands on the trading floor, according to traders' estimates.


The USDA has estimated that Argentina will produce 16 million tons of corn in 2003-04. Of this amount, around 12 million tons will likely be exported, the USDA has said.


Argentina's Agriculture Secretariat expects farmers to harvest 15 million tons during the 2003-04 campaign. About 10% of the campaign has already been seeded in northern parts of Argentina with planted area expected to reach 3.15 million hectares in 2003-04.


However, corn area could decline further than this if prices drop in the weeks ahead, as farmers substitute corn planting with soy.




Wheat for immediate delivery closed at around 375 pesos in southern ports, up from about 360 a week ago in CBOT, as the lack of major demand caused prices to stabilise.


Wheat prices ended 325 pesos in the country's Rosario Exchange.


The USDA estimates Argentina's 2003-04 wheat production at 13.5 million tons, out of which 8.5 million tons will be sent for export.


Last week, the Agriculture Secretariat said planted area for 2003-04 wheat would decline 4.3% to 6.0 million hectares. Last year's area total 6.3 million hectares and production amounted to 12.3 million tons.


The expected decline in area is blamed on a lack of rainfall. Also, weather conditions have been so cold and dry that 2003-04 production will not reach 13 million tons. Other analysts have estimated wheat output at no more than 12.9 million tons in 2003-04.
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