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August 24, 2012


(See attached file: PR 120824.pdf) (See attached file: PR 120824.xls)

Highlights:

  • Wheat markets were down for the week. After prices rose on Monday and Tuesday supported by Russian production concerns, a weaker dollar and strength in the corn market, all three markets gave back the gains in the second half of the week. Profit taking following a strong 5-day rally and a Statistics Canada survey suggesting above average production in Canada weighed heavily on markets. Much needed rain in the drought-stricken southern U.S. Plains also added pressure. The CBOT September SRW contract lost 7 cents on the week to close at $8.68/bu. KCBT and MGEX September contracts each closed 9 cents lower at $8.76/bu and $9.18/bu, respectively. CBOT September corn gained 3 cents to $8.01/bu and CBOT soybeans added 67 cents to close at $17.38/bu.
  • Based on a survey of 15,000 farmers, Statistics Canada expects 2012/13 Canadian wheat production to reach 27.0 MMT, up 6.9 percent from 2011/12 and equal to USDA’s estimate.
  • In its monthly report, the International Grains Council (IGC) lowered its 2012/13 global wheat production estimate by 3.0 MMT to 662 MMT, well below the prior season's 696 MMT. IGC cut estimated 2012/13 global corn production by 26.0 MMT to 838 MMT and total global corn stocks to 120 MMT, a nine-year low.
  • IGC cut its forecast for Russia's crop by 4.0 MMT to 41.0 MMT, which would be lower than the 2010 crop, which led Russia to impose a ban on exports. Russian agricultural analyst SovEcon reduced its wheat production estimate this week to 39.0 MMT from an earlier forecasted 40.5-42.5 MMT. The start of harvest in the Urals and Siberia regions showed weak crop prospects, prompting the decreased forecast.
  • The Baltic Panamax Index closed at 828, up from 806 last week. There is no new fundamental news supporting the increase. New vessels have been added to the world fleet in 2012 despite low cargo demand. Maritime Research's Grain Freight Index declined from 506.6 to 501.5.
  • The ICE Dollar Index declined this week from 82.66 to 81.60 on Friday.

File Name
PR 120824.pdf
PR 120824.xls
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