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September 28, 2012


(See attached file: PR 120928.pdf) (See attached file: PR 120928.xls)

Highlights:
  • All three wheat futures markets closed higher this week thanks to a significant rally on Friday. The nearby contracts dipped more than 50 cents in four consecutive days of losses before Friday’s rally. Growing concerns surrounding the global economy strengthened the U.S. dollar and caused a wave of selling in wheat futures early in the week. In addition, rain in the drought stricken mid-west and weak demand for high protein wheat pressured prices. On Friday, several major market reports provided bullish news for wheat and corn, driving prices higher. CBOT December wheat contract gained 5 cents to $9.03/bu. KCBT and MGEX December contracts each added 1 cent to close at $9.28/bu and $9.59/bu, respectively. CBOT December corn added 8 cents to $7.56/bu and CBOT January soybeans closed 19 cents lower at $16.03/bu.

  • In its quarterly grain stocks report released Friday, USDA’s estimates of 2012/13 wheat and corn stocks fell significantly short of analysts’ expectations. USDA estimated all wheat stocks on September 1, 2012 at 57.2 MMT, down 2 percent from a year ago. Estimated corn stocks totaled 26.9 MMT, down 12 percent from last year and indicates very tight corn supplies.

  • The International Grains Council on Friday cut its estimate for world wheat and corn production, citing further crop damage from poor weather in EU, Russia and Australia. IGC lowered its 2012/13 wheat production estimate from 662 MMT last month to 657 MMT and below USDA’s September estimate of 659 MMT. It lowered estimated corn production to 833 MMT, down from 838 MMT last month.

  • Drought Monitor says that 88 percent of Kansas, the largest HRW producing state, is in extreme drought as farmers plant the winter wheat crop. Light rainfall this week provided much needed moisture and could boost planting prospects.
  • The Baltic Panamax Index fell for the fifth straight week to 425, down from 467 last Friday. The index has fallen 73 percent in 2012 because of weak demand and an oversupply of vessels. Continuing weakness in the iron ore market pressured the index this week. Maritime Research’s Grain Freight Index increased for the second week in a row from 414.5 to 419.3.

  • The ICE US Dollar Index closed firmer this week at 80.03, up from 79.40 last Friday.

File Name
PR 120928.pdf
PR 120928.xls
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