DJ Argentine Soy, Corn Prices Rise After Bullish USDA Report 12.08.2011
--USDA cuts U.S. crop prospects, boosting global grain markets
--Higher prices fuel selling in Argentina
--Wheat trade still stalled
BUENOS AIRES (Dow Jones)--Argentine soybean and corn prices got a boost this week on poorer-than-expected crop prospects in the U.S.
The news sparked heavy selling in Argentina Thursday by farmers who has sat out the market over the past few sessions due to uncertainty fueled by volatility in global markets.
Spot soy sold for 1,315 pesos ($318) per metric ton at the Rosario Grain Exchange Thursday, up from ARS1,300 a week ago.
May 2012 soybean contracts sold for $315 per ton, unchanged from a week ago.
Argentina is the world's third-largest exporter of soybeans and leads soymeal and soyoil exports.
Argentine soy prices tracked the steep gains at the Chicago Board of Trade, which acts as a global benchmark price, the Rosario Exchange said.
In Chicago, grain prices shot up following reduced output estimates issued by the U.S. Department of Agriculture in its monthly crop report. The department slashed its outlook for the upcoming harvests after damaging heat and dryness took a toll on corn and soybean fields in July and excessive rains stalled spring wheat plantings.
The higher prices fueled farmers to bring 20,000 tons of soybeans to the spot market, the exchange said.
Argentina's farmers had been holding on to the recently harvested soybeans in the hope of higher prices, with about half of the crop still sitting in silos and in plastic storage bags out in the fields.
July 2012 corn changed hands at $177 per ton, up from $175 a week ago. Sellers brought 30,000 tons of corn for September delivery to market and sold it for $170 a ton after a pause last week.
Argentina is the world's second-largest corn exporter behind the U.S.
Wheat trade was stalled again, with farmers complaining that the government continues to hold up export permits.
The government tightly controls wheat and corn exports to keep a lid on local prices, only issuing export permits once domestic supply has been set aside.
The slow pace of approvals has stunted trade at the local exchanges and caused farmers who need to sell to accept steep discounts for their wheat.
The vast majority of Argentina's wheat exports go to neighboring Brazil