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January 29, 2010

(See attached file: PR 100129.pdf)(See attached file: PR 100129.xls)

Highlights:
  • A strengthening dollar and abundant global stocks continued to pressure wheat futures, pushing prices down to their lowest level since early October. CBOT nearbys closed on Friday at $4.74/bu, which is down 24 cents from last week and 94 cents over the past three weeks. KCBT nearbys fell 15 cents on the week, closing at $4.87/bu. MGEX was down 11 cents, to $5.00/bu. CBOT soybean prices were down sharply amid rumors that China will purchase more beans from South America. The March soybean contract fell 37 cents, closing at $9.14/bu. Corn was also down, losing 8 cents and closing at $3.56/bu.
  • In their initial 2010/11 wheat production forecast, Agriculture and Agri-Food Canada projected total Canadian production to fall 7 percent, from 26.5 MMT in 2009/10 to 24.7 MMT in 2010/11. The government agency expects durum production to fall 24 percent, from 5.4 MMT in 2009/10 to 4.1 MMT in 2010/11. While plantings for all other classes of wheat are estimated to increase slightly, production is forecasted to fall 2 percent due to lower projected yields.
  • Basis levels were firmer this week, primarily due to transportation delays caused by heavy snowfall across the Great Plains. Spring wheat premiums in particular were higher, with HRS/gulf 13.5 basis for February delivery rising 30 cents, to $1.95/bu.
  • Freight rates continued to soften this week. The Baltic Panamax Index (BPI) closed on Friday at 3,420, which is down 7 percent from last week and down 19 percent from the first week of January. The BPI has received recent pressure from an increased supply of ships on the market and slowing Chinese demand for iron ore. Routes to Japan were also down, with Gulf/Japan at $66/mt and PNW/Japan at $38/mt.
  • The dollar continued strengthening this week. The Dollar ICE Index reached its highest point since last July, standing at 79.47 on Friday. The index gained 2 percent from last week’s close (78.28) and has gained 4 percent in just over two weeks.

File Name
PR 100129.pdf
PR 100129.xls
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