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October 30, 2009

(See attached file: PR 091030.pdf)(See attached file: PR 091030.xls)

Highlights:
  • Futures contracts traded down this week as a strengthening dollar put pressure on commodity prices. An improved weather forecast for the delayed corn and soybean harvests also pushed prices down. CBOT nearbys fell to $4.94/bu, a 53-cent drop from last week. KCBT December contracts dropped 50 cents on the week, closing at $4.99/bu. MGEX nearbys were down 48 cents to $5.12/bu. Corn and Soybeans both fell 31cents this week, with corn closing at $3.66/bu and beans at $9.76/bu.
  • The International Grains Council (IGC) released their latest Grain Market Report this week. The IGC increased their global production forecast by 1 million metric ton (MMT), to 667 MMT. Production estimates increased for the U.S., Canada, Kazakhstan, and Australia. IGC’s U.S. production estimate is 60.4 MMT, equivalent to USDA’s projection. The Canadian production forecast increased by 2.0 MMT, Kazakhstan by 0.7 MMT and Australia by 0.5 MMT.
  • SRW basis continued to firm up as rain caused significant planting delays across the Midwest. The latest USDA Crop Progress report placed winter wheat planting at 76% complete, below the 5-year average of 85%. The greatest delay is in Illinois, where winter wheat seeding is 33% complete, well below the 5-year average of 82%.
  • Last week’s export sales were down 45 percent from the previous week and below trade estimates of 400,000 to 600,000 MT. Sales reached 347,700 metric tons with increases reported for Taiwan (25,850 HRW, 38,490 HRS, 9,536 white), Japan (8,360 HRW, 40,480 HRS, 23,920 white), Thailand (13,000 HRW, 18,000 HRS, 14,000 white), Nigeria (34,025 HRW, 5,000 SRW, 4,831 durum), South Africa (33,000 HRS), the Philippines (3,700 HRW, 20,425 white), Venezuela (5,550 HRW, 16,200 HRS), Mexico (9,131 HRW, 1,000 HRS, 2,619 SRW), and Spain (12,260 HRS).
  • The dollar gathered strength this week against other major currencies. The ICE dollar index climbed from 75.38 last week to 76.39 this week. This is the first weekly gain for the index in 4 weeks.
  • Ocean freight rates also strengthened, with the Baltic Panamax Index gaining 3% to close at 3,150 this week. The Gulf/Japan route currently stands at $66/mt and PNW/Japan at $37/mt. Chinese demand for iron ore continues to be the primary driver of freight rates.

File Name
PR 091030.pdf
PR 091030.xls
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