December 12, 2008

Argentina corn, soy futures up on week in commodity rebound

Argentine corn and soy futures got a boost this week, in line with prices at the Chicago Board of Trade, where an easing of the dollar relative to many major currencies and rising oil prices pushed grains higher.


Wheat prices ended the week lower, while spot corn was unchanged as the positive week wasn't enough to make up for the steep losses suffered at the end of last week.


"The falling dollar and [rising] oil are giving a good push" to corn and soy futures, said Roagro analyst Carlos Boglioli in a market note.


The international soy market is in the midst of a technical bounce from last week's drop to contract lows and, with weakness in the US dollar and soaring crude-oil futures, speculative buying and short covering is a featured attraction, analysts in Chicago said.


Meanwhile, Argentina's reduction of corn and wheat export taxes last week appears to have had a limited effect on local prices, in part due to the closure of old-crop corn exports, the Rosario Grain Exchange said.


Last week, President Cristina Fernandez announced that the export taxes on wheat and corn will be lowered by five percentage points, and reduced even further if farmers increase output.


Wheat exports will now be taxed at 23 percent, while corn shipments will carry a maximum 20 percent export tax.


Export taxes will be reduced an additional percentage point for each million ton of corn and wheat produced over a fixed benchmark.


The export tax on soy was left unchanged at 35 percent.


Despite the gains on the week, a large amount of old-crop soy stocks limited the price increases, the Rosario Exchange said.


Spot soy was traded at ARS715 (US$209.68) per tonne, up from ARS670 a week ago.


May 2009 soy was priced at US$190 tonne. up from US$185 a week ago.


Harvest pressure weighed on spot wheat prices as a growing amount of the new crop made its way to market, the Rosario Exchange said.


Spot wheat was traded at ARS400 per tonne in Rosario Thursday, down from ARS405 a week ago.


December/January wheat was priced at US$116 per tonne, down from US$118 last week.


Spot corn traded at ARS260 a tonne in Rosario Thursday, unchanged from a week ago.


April 2009 corn sold at US$95 per tonne, up from US$89.


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