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October 10, 2008

(See attached file: PR081010.pdf) (See attached file: PR081010.xlsx)

  • Futures ended the week at a 16-month low amid turmoil in the financial markets and bearish world wheat projections. Index funds, which invest in a basket of commodities, continue to shed net-long positions in row crops and wheat as they move to cash positions. Increased supply projections from USDA also weighed on the market. The CBOT nearby contract closed 77 cents/bu lower at $5.64/bu, KCBT closed 66 cents lower, while the MGE ended 64 cents lower at $6.39/bu. Soybeans ended the week 83 cents/bu lower and corn closed down 48 cents/bu at $4.08/bu.
  • The October WASDE projected larger than expected U.S. ending stocks of 16.4 MMT, up from 15.6 MMT in September with higher feed and residual use offsetting increased production. The adjusted USDA ending stocks estimate was significantly higher than the average trade estimate of 15.2 MMT.
  • Ocean freight values continued falling this week with the Baltic Panamax Index (BPI) declining 11 percent to 2,029. The BPI is off 66 percent since September 1. Gulf/Japan freight Indications were off 58 percent from May highs at $48/MT. Rates to Japan out of the PNW were sharply lower at $30/MT, down nearly 65 percent from last November.
  • Export sales this week were strong with net sales of 512,000 MT for 2008/09 and 53,800 MT for 2009/10 crop for a total of 565,800 MT. As of October 2, cumulative wheat sales stand at 64.5% of the USDA forecast for 2008/2009 versus a 5-year average of 53.8%. Sales of 280,000 MT are needed each week to reach the current USDA forecast for 2008/09.
  • Producers this week had planted 59 percent of the winter wheat crop, advancing 17 points from the previous week, and are 5 points ahead of last year’s pace. No serious planting delays were reported with all states within 13 points of the 5-year average. Emergence was 28 percent complete, 3 points ahead of last year but slightly behind the 5-year average.
  • The dollar traded stronger against most major currencies this week as investors look to safer currencies. The euro lost 5 percent against the dollar this week, while the Australian dollar lost traded 15 percent lower.

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