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May 13, 2011

(See attached file: PR 110513.pdf)(See attached file: PR 110513.xls)

Highlights:
  • Futures traded mixed this week with CBOT nearbys losing 28 cents from a week ago. The USDA World Agricultural Supply and Demand Estimates (WASDE), which was a bearish factor for wheat prices, pegged US winter wheat production at 38.8 MMT, above trade estimates of 38.0 MMT. Projected SRW production of 11.6 MMT came in above average trade expectations of 10.8 MMT. The CBOT May contract closed at $6.96/bu, its lowest point since March 16. Losses for the KCBT contract were limited due to ongoing dry conditions and lower crop ratings. The KCBT May contract closed at $8.58/bu, down nine cents from a week ago. With cool temperatures and wet conditions continuing to delay spring wheat plantings, the MGEX May contract gained one cent on the week, closing at $9.11/bu. CBOT soybean prices were up this week on gains in oil prices and slow planting progress. The CBOT May contract gained 12 cents, closing at $13.37/bu. Corn prices fell this week as the WASDE increased ending stocks estimate weighed on prices. However, losses were limited due to slow planting progress and gains in oil. The CBOT corn nearby contract fell three cents on the week, closing at $6.79/bu.
  • USDA released their preliminary 2011/12 crop projections in this week’s WASDE. USDA pegged 2011/12 global wheat production at 670 MMT, an increase of a three percent increase from 2010/11 and the third largest crop on record. With global carryover stocks of 182 MMT, USDA forecasted global wheat supplies at a record 852 MMT. USDA projected US production at 55.6 MMT, down from 60.1 in 2010/11.
  • French analyst Strategie Grains reduced their 2011/12 European wheat production estimate due to ongoing dry conditions in western Europe. The firm projected EU soft wheat production at 131.5 MMT, down 3.7 MMT from last month’s projection of 135.2 MMT. Strategie Grains forecasted 2011/12 EU durum production at 8.3 MMT, down from 9.1 MMT in 2010/11.
  • In their May Grains and Oilseeds Outlook, Agriculture and Agri-Food Canada projected 2011/12 Canadian wheat production at 26.2 MMT, up 13 percent from 2010/11. The projection included 4.7 MMT for durum and 21.5 MMT for all other wheat. Ag Canada projected wheat planted area at 10.1 million hectares, up from 8.5 million hectares last year. Canadian wheat plantings remain well behind schedule, however, due to cool temperatures and wet conditions. The Canadian Wheat Board reported planting progress at three percent complete, compared to an average 40 percent through the first week of May.
  • The Buenos Aires Grain Exchange projected an increase in Argentina’s wheat planted area for the 2011/12 crop. The Exchange forecasted wheat planted area to reach 4.95 million hectares, up five percent from last year, due to beneficial rainfall in April and early May.
  • SRW FOB basis was up again this week due to heavy rainfall and severe flooding conditions along the Mississippi River. SRW basis for nearby delivery was up $0.10/bu, to $1.10/bu.
  • The ICE Dollar Index was higher this week, reaching a one-month high at 75.81 on Friday. This is up from 74.84 a week ago.
  • The Baltic Panamax Index was down this week, falling from 1,769 last week to close at 1,720 on Friday. The Baltic Dry Index also slipped this week, falling from 1,340 a week ago to close at 1,306 on Friday.

File Name
PR 110513.pdf
PR 110513.xls
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