October 30, 2009

Argentine grain prices went for a roller-coaster ride this week, tracking the steep declines and rebound at the Chicago Board of Trade.

 

A stronger US dollar early in the week caused prices to drop, but an easing in the greenback on Thursday (October 29) fuelled the partial recovery, the Rosario Grain Exchange said.

 

May 2010 soy futures traded at US$223 and US$225 a tonne in Rosario Thursday, compared to $225 a week ago.

 

Spot soy were traded at ARS960 (US$251) a tonne in Rosario Thursday, down from ARS975 a week ago.

 

Corn prices got a boost, with strong demand from exporters buoying the local market.

 

Spot corn sold for ARS479 a tonne Thursday. The contract wasn't traded a week ago.

 

The solid demand pushed prices closer to the government's official reference price of ARS490 per tonne, which exporters have agreed to pay but have so far failed to follow through on.

 

In September, the government announced it had reached a deal with grain exporters and millers to open up wheat and corn shipments while guaranteeing domestic supply.

 

As part of the deal, exporters agreed to pay farmers a theoretical FAS price determined by the government. That theoretical Free-Alongside-Ship price is the Free-On-Board price minus export taxes and transport costs.

 

The government agreed to grant export permits for 2009-10 corn and wheat in exchange for a commitment from exporters to ensure 6.5 million tonnes of wheat and 8 million tonnes of corn for domestic supply. Exporters will sell back supplies if the government finds that the crops have been oversold.

 

March 2010 corn contracts changed hands at US$115 per tonne at the Rosario Grain Exchange Thursday, up from US$111 and US$113 a week ago.

 

Neither spot wheat nor futures were traded on Thursday.