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September 26, 2008

(See attached file: PR080926.pdf) (See attached file: PR080926.xlsx)

  • Futures traded up and down again this week amid continued financial market uncertainty. Lack of export demand and ideal winter wheat planting conditions also weighed on the market. The CBOT nearby contract closed 2 cents per bushel lower at $7.16/bu, KCBT closed 11 cents lower, while the MGE ended 5 cents/bu higher.
  • Sales of U.S. wheat slowed this week to a marketing year low of 284,300 metric tons (MT) , off 57 percent from the previous week and 41 percent from the prior 4-week average. HRS sales led the way with 129 TMT bringing accumulated sales since June 1 to 3.0 MMT. SRW sales to Egypt and Mexico pushed accumulated sales to 3.6 MMT, which is just under USDA’s 2008/09 SRW forecast of 3.95 MMT. Total sales of 297,000 MT are needed each week to reach the USDA forecast of 27.22 MMT.
  • Freight markets continued to decline this week as the Baltic Panamax Index (BPI) dropped 35 percent to 3,458, with most of the decline coming over the past two days. The PNW-Japan rate is down $11/MT from last week to $48/MT, while Gulf-Japan is down $19/MT to $68/MT.
  • USDA reported U.S. winter wheat planting is 22 percent complete, compared with 24 percent by this time last year and the 5-year average of 30 percent. In the western winter wheat region, producers were seeding on time or slightly ahead of normal, while planting was mostly behind schedule elsewhere.
  • The U.S. spring wheat harvest is near completion with 97 percent complete, up from 92 percent the previous week and on par with the 5-year average. Durum harvest is also wrapping up with 93 percent of the North Dakota crop and 88 percent of the Montana crop compete.
  • International Grains Council increased its estimate for global wheat production in 2008/09 to a record 676 MMT, up 4 MMT from last month. Increases of 2.0 MMT for the EU and 4.0 MMT for the CIS offset a 2.0 MMT decline for Australia.
  • The EU granted export licenses for 672,000 MT of wheat this week, bringing the marketing year total to 5.5 MMT, up from 1.8 MMT this time last year. The current pace accounts for 31 percent of USDA’s forecasted total of 18 MMT.

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