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January 11, 2013


(See attached file: PR 130111.pdf) (See attached file: PR 130111.xls).

Highlights:
  • A bounce from USDA’s monthly WASDE report on Friday helped all three wheat futures markets close higher this week. After futures markets fell to their lowest point in six months last week, a round of buying on Monday pushed prices higher. But crop-friendly rain, a disappointing export sales report and a strong dollar pushed markets lower again mid-week. The dollar weakened and USDA lowered estimated exports for three major exporters, proving bullish for U.S. markets Friday. The CBOT March wheat contract gained 8 cents to close the week at $7.55/bu. MGEX gained 4 cents to $8.45/bu and KCBT closed at $8.07/bu, a 3 cent increase. CBOT March corn jumped 29 cents to $7.09/bu and CBOT March soybeans gained 6 cents to $13.73/bu.
  • SRW basis fell this week thanks to a sharp reduction in barge freight rates on the Mississippi river. Low water levels started to rise, allowing for an influx of vessels to meet backed up demand.
  • In its monthly WASDE update, USDA lowered 2012/13 global wheat production by 1.0 MMT to 654 MMT. Lower estimated production in Russia and Argentina accounted for most of the change. A 500,000 MT increase in world feed use offset an increase in estimated food use of the same amount. Estimated world trade fell form 133 MMT to 132 MMT. The only change in U.S. estimates was a 1.0 MMT increase in feed use (9.53 MMT), resulting in a 1.0 MMT reduction in carry out stocks. USDA reduced estimated exports in Argentina, Australia and Canada by 500,000 MT each and increased expected Russian exports by the same amount.
  • USDA released its winter wheat seeding estimates on Friday. Winter wheat seeded area for 2013 is expected to increase 1 percent from last year to 41.8 million acres, including 29.1 million of HRW, 9.42 million of SRW and 3.27 million of white winter wheat. According to USDA, more acres were seeded this year due to the early row crop harvest and higher wheat prices.
  • USDA reported commercial wheat sales on Thursday of 233,700 MT, down 42 percent from the previous week and the lowest in nine weeks. Extended holidays around the new year likely contributed to the slowdown but lower demand pressured futures prices. Total known outstanding sales and accumulated exports for the 2012/13 marketing year, through January 3, 2013 were 19.3 MMT, 3 percent lower than last year's year-to-date total of 20.0 MMT.
  • Despite modest drought relief from precipitation in the U.S. Southern Plains, Midwest and Delta regions, the government declared much of the central and southern U.S. Wheat Belt a natural disaster area on Wednesday. Persistent dry weather has resulted in the worst drought in more than 50 years. The rains temporarily pressured prices this week.
  • The Baltic Panamax Index closed at 772 on Friday, a 15 percent increase from last week. A large number of enquiries in the Atlantic, particularly from the east coast of South America, pushed the index higher. Maritime Research's Grain Freight Index increased this week from 486.2 points to 494.0.
  • The US Dollar Index increased 1 percent this week to 80.61, up from 79.62 last week.

File Name
PR 130111.pdf
PR 130111.xls
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