Low river levels in the main export complex of Argentina has lead to much lower corn prices on a FOB basis, market sources told Agricensus Friday, as buyers can only lift part cargoes leaving a surplus of the grain that must be exported at docks.

As sellers need to apply for an export licence in a given month, any surplus stocks at the Up River hub of Rosario and San Lorenzo port complexes have to be sold during that period, leading to a sharp fall in prices.

Argentinian prices for a 25-40,000 mt handysize cargo of corn loading in the next two months were assessed at $146.25/mt FOB on Thursday, down $28/mt since the start of the month.

That compares with the US Gulf FOB price of a similar shipment at $147.50/mt versus $163/mt over the same period, a fall of $16/mt.

That dynamic has led to Argentina becoming the lowest-priced origin on an FOB basis for corn shipments in the next two months.

However, to lift the grain will generate costly freight due to lower cargoes.

“Water levels play against activity, but people are now looking for smaller cargoes. Instead of 40,000 mt, they look for 30,000-35,000 mt,” one market source said.

“There is some surplus of the goods not loaded and surplus of export licences for the quantities not exported,” the source said.

“The draft of the Parana river hasn’t allowed too many goods, and exporters were long with a good flow of trucks and spot farmer selling,” a second source said.

On a basis level, May loading cargoes were heard offered at 58 cents over the CME July corn futures contract last Friday, with indications overnight suggesting offers have now dropped to 45 cents – a 22% fall in premiums in just under a week.

Trades for June loading handysize cargoes have been heard at 48 cents over July late Wednesday, with further trades heard overnight at 41 cents and 40 cents, although the latter trades have not been confirmed.

Low water levels along the Parana have followed a particularly dry spell for the region, with authorities in the country in negotiations with Brazil’s hydroelectric sector to discuss opening some damns further up-river to boost water supplies, all to little avail.