Argentina Up River FOB corn premiums soften on profit taking

Corn premiums in the Argentina FOB Up River market have weakened despite a raft of bearish fundamental data, with market sources pointing to profit taking on the back of recent price rises.

“80 cents [over March] has been quoted and looking for demand in March, but there are some long position on paper bought cheap and people are cashing in some money,” one market source said.

The softer tone was also seen in April, where trades had been heard at 63 cents over the May futures contract

Agricensus assessed the physical basis for Up River FOB corn at an 83 cent premium to the March contract on Thursday, with April assessed at 68 cents over, with differentials firming in recent days as weather fears have mounted.

“March is a bit technical… there are still plenty of reasons to be cautious and not to get caught short, but the way it looks I think there are more reasons not to be long,” a second market source said.

The dry weather across South America has played havoc with the fledgling soybean and corn crops, with both facing dramatic revisions in the light of the protracted heat and lack of rain.

With the February edition of the USDA’s WASDE report trimming the size of Argentina’s corn crop from 42 million mt to 39 million mt and as Argentina’s 2016/17 crop approached exhaustion, differentials firmed.

Adding to that, Thursday’s report from the Buenos Aires Grain Exchange threw sharp light on the damage to the early corn crop, with 100% of the crop now planted, the national average shows 58% of it in a poor or very poor condition.

One state, Centro-Norte de Santa Fe, is currently showing 82% very poor and 12% poor for its early corn.