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August 17, 2012


(See attached file: PR 120817.pdf) (See attached file: PR 120817.xls)


Highlights:
  • Wheat markets fell sharply Monday and Tuesday on easing world supply fears and a lack of competitiveness of US wheat for export due to high prices. However, the resulting lower prices prompted selling and that, combined with a rebound in corn, helped wheat futures regain most of the losses by Friday. CBOT September wheat closed 11 cents lower on the week at $8.75/bu. The KCBT September and MGEX September contracts each lost 8 cents to close at $8.86/bu and $9.27/bu, respectively. CBOT September corn and soybeans each closed 2 cents lower at $7.99/bu and $16.71/bu, respectively.
  • Tuesday’s close marked the biggest three-day loss for the nearby CBOT wheat contract since July 2011, shedding 8 percent during the period. KCBT lost 7 percent and MGEX lost 6 percent in the same stretch.
  • Russian agricultural analyst firm SovEcon reported this week that the country’s exportable grain surplus could run out by November if the high export pace continues. The firm said Russian grain farms started the year at historically low supply levels due to strong demand and it cut the Russian production estimate to 70-74 MMT from the previous estimate of 72-75 MMT. The news revived concern of tight world wheat supply and supported U.S. futures prices on Wednesday and Thursday.
  • In its monthly crop report released Thursday, Strategie Grains improved its estimate for EU soft wheat by 1.7 MMT to 125.3 MMT but stressed that tight global supply will limit demand through high prices. The report reignited tight supply concerns and supported prices.
  • The Baltic Panamax Index closed at 806, down from 814 last week. An oversupply of vessels continues to weigh on both the index and physical rates. Maritime Research's Grain Freight Index declined from 512.6 to 506.6.
  • The ICE Dollar Index increased slightly this week from 82.63 to 82.66 on Friday.

File Name
PR 120817.pdf
PR 120817.xls
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