Argentina's corn, wheat prices increase

Keyword:
Publish time: 22nd October, 2013      Source: www.cnchemicals.com
Information collection and data processing:  CCM     For more information, please contact us
   


October 22, 2013

   

   

Argentina''s corn, wheat prices increase

   

   

   

In the last few days, Argentina''s wheat and corn prices have increased for reasons that there does not seem to be enough corn or wheat to go around, which is driving prices higher and causing concern for the users of these grains.

   

   

On the corn side, the problem has to do with the "reported" harvest numbers and the "real" harvest numbers. For the 2012-13 cycle, the Ministry of Agriculture reported 32.1 million tonnes. The Interior Commerce secretary reported 30.3 million tonnes. And private estimates put the harvest at between 26 and 28 million tonnes. Those are significant differences.

   

   

Some of the number variations have to do with crop yield estimates. The official government numbers report a yield of 9.5 tonnes/hectare, while private estimates say the average was more likely 7.6 tonnes/hectare.

   

   

One producer who has analysed the numbers estimates that the corn available to users amounts to1.63 million tonnes. With a monthly usage of 660,000 tonnes, that means there are only two and half months of corn supplies left. That is creating tension in the market. The Argentine Chamber of Feedlots said that corn is quite difficult to get. Poultry producers say that they are also having trouble getting corn, but place the blame on the exporters.

   

   

Corn buyers are now paying more. According to a producer, a month ago corn was going for US$850-900/tonne, with the producer paying the US$200 shipping cost. Today, the buyers are paying that shipping cost.

   

   

For its part, Maizar, the Argentine Corn and Soy Association, says there is no shortage of corn and it is impossible that Argentine would be left without corn. Maizar indicates that Argentina had a bountiful harvest and that 30.3 million tonnes is the real number.

   

   

On the other hand, wheat prices have shot up for new harvest, which is not looking good due to weather issues. The mills are fighting each other for the wheat and so the Argentine wheat prices are among the highest in the world.

   

   

Prices for the new harvest, which starts in November, are at US$500/tonne for immediate delivery, while in Chicago the price is US$250/tonne.

   

   

There was a bad 2012-13 harvest and the new harvest is delayed due to drought and early freezes. This means there is very little wheat left for the users, and therefore the fierce competition in getting supplied.

   

   

The Bolsa de Cereales de Buenos Aires estimates that the new harvest will reach 10.35 million tonnes. The previous harvest was barely 8.2 million tonnes. Argentina consumes around 6.5 million tonnes of wheat a year.