December 1, 2006

 

Argentina's soy, grains higher on CBOT, farm strike

 

 

Argentine corn and soy prices were up Thursday (Nov 30) compared to last week in line with Chicago and on concerns over supplies in the face of next week's farm strike, analysts said.

 

Two of Argentina's leading farm groups announced that they will commence a strike Sunday lasting at least one week in protest of government intervention in agricultural markets.

 

However, concern over the strike was muted. There are other growers who will not be striking, and if farmers don't have storage capacity, they are going to have to bring their goods to market, Granos del Parana trader Federico Mircoli said.

 

 

Wheat

 

Spot wheat were held down due to a number of producers unloading stocks after weeks of stalled trade, Mircoli said.

 

Trade had been frozen on uncertainty surrounding an expected government intervention to keep down domestic prices in an attempt to control bread costs, an important component of the inflation index.

 

Last week the Secretary of Agriculture announced a plan to require exporters to sell one half of a tonne of discounted wheat to millers for every tonne that they export.

 

The proposal was sent to the Economy Ministry for review, and a decision is expected shortly, according to the Agriculture Secretariat.

 

Spot wheat closed unchanged at ARS380 (US$123.7) at the Rosario Cereals Exchange Thursday. December wheat traded at US$130.00 up from USUS$127 last week.

 

Argentina is expected to produce 13.6 million tonnes of wheat in 2006/07, according to the Agriculture Secretariat.

 

 

Corn

 

Corn prices followed Chicago higher over the past week, but found a ceiling under the cloud of an expected government intervention, Mircoli said.

 

Cash corn sold for ARS400 per tonne, up from ARS390 a week ago. April 2007 futures rose to US$123 compared with US$115 per tonne last week.

 

Last Monday, the Agriculture Secretariat closed the registry for new-crop export declarations to review a recent surge in declarations.

 

Exporters had declared some 3.5 million tonnes of new-crop exports over the previous two weeks.

 

The temporary closure is not expected to affect exports, Secretary of Agriculture Miguel Campos said when announcing the closure.

 

Argentina will plant an estimated 3.3 million hectares with corn during the 2006/07 crop cycle, up 3 percent from 3.18 million in 2005/06, according to the Agriculture Secretariat.

 

The US Department of Agriculture estimates that Argentina will produce 17.5 million   tonnes of corn during 2006/07.

 

 

Soy

 

Soy prices continued to gain in line with Chicago, Mircoli said.

 

Cash soybeans sold for ARS620 per tonne Thursday, up from ARS613 a week ago. May 2007 soybeans closed at USUS$199 per tonne, up from USUS$192 a week ago.

 

The Agriculture Secretariat forecasts that a record 15.9 million hectares will be planted with soy in 2006/07.

 

The USDA estimates that Argentina will produce 41.3 million tonnes of soy from the 2006/07 crop.