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March 9, 2012


(See attached file: PR 120309.pdf) (See attached file: PR 120309.xls)

Highlights:
  • U.S. wheat futures rose Friday following four consecutive days of losses but ended lower week over week. Global concern surrounding the Iran nuclear situation and potential delays in the Greek bailout agreement pressured prices early in the week. Technical selling and positioning by funds ahead of the USDA supply and demand report also pushed prices lower. Futures regained some of the loss after the report’s release on Friday, which provided less-bearish (still not bullish) global wheat supply estimates than analysts expected. The CBOT March wheat contract lost 32 cents on the week to close at $6.39/bu. KCBT lost 31 cents to close at $6.80/bu and MGEX closed at $8.02/but, a 26-cent decline. CBOT corn is down 5 cents this week at $6.54/bu and CBOT soybeans gained 3 cents to close at $13.32.
  • The spread between CBOT corn and wheat swung 27 cents this week, with March corn closing 15 cents higher than wheat on Friday compared to wheat’s 12-cent advantage last week. The spread between the CBOT corn and KCBT wheat contracts narrowed to 26 cents, down from 52 cents last week.
  • USDA released its monthly world agricultural supply and demand estimates on Friday. Total 2011/12 wheat supply was virtually unchanged at 894 MMT as lower beginning stocks (200 MMT) offset an increase in world production (694 MMT). Total world trade increased 2.1 MMT to 138 MMT, the largest increase being Iran, for which imports are up 800,000 MT due to a recently flurry of purchases. Global wheat consumption increased 3.5 MMT to a record 684 MMT and ending stocks decreased the same amount to 210 MMT. The revised estimates were more bullish than analysts expected and supported prices on Friday.
  • The Baltic Panamax index closed higher this week at 889, up from 844 last week. Grain freight traders said the increase was likely not from increased demand but owners taking vessels out of service to reduce expenses and therefore temporarily decreasing supply. Maritime Research’s Grain Freight Index gained for the third week in a row, up from 505.4 to 513.2.
  • The ICE Dollar Index closed higher this week at 80.08, up from 79.46 last Friday. The stronger dollar contributed to wheat market losses throughout the week.

File Name
PR 120309.pdf
PR 120309.xls
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