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April 27, 2012

(See attached file: PR 120427.pdf) (See attached file: PR 120427.xls)

  • Wheat futures closed mixed this week. CBOT and KCBT closed lower early in the week amid favorable weather forecasts and profit taking but strength in the corn and soybean markets helped both contracts rally late in the week. Support from other commodities was unable to help MGEX overcome pressure from excellent planting conditions that continue to weigh heavily on spring wheat prices. A shift to less favorable weather conditions also supported CBOT and KCBT late in the week. CBOT lead the way with a 27-cent gain to close at $6.42/bu and KCBT gained 21 cents to close at $6.47/bu. MGEX lost 17 cents on the week to close at $7.74/bu. CBOT corn closed 41 cents higher at $6.53/bu and CBOT soybeans closed at $14.97/bu, a 50-cent gain.
  • For the first time since 1977, CBOT corn closed at a premium to the KCBT HRW contract. May corn contract closed with a 6 cent premium to the KCBT HRW May contract and an 11 cent premium to the CBOT SRW wheat contract. Last week KCBT held a 13-cent premium to corn and CBOT SRW held a 3-cent premium. The spread between CBOT SRW and KCBT HRW narrowed from 10 cents last week to 5 cents this week.
  • In its weekly crop conditions report on Monday, USDA rated the U.S. winter wheat crop at 63 percent good to excellent, down from 64 percent last week but up from 35 percent last year at this time. It rated 10 percent of the crop poor to very poor, compared with 11 percent last week and 40 percent last year. USDA showed spring wheat planting as 57 percent complete, a record for the third week in April. It pegged crop emergence at 18 percent, up from 10 percent last week and just 2 percent this week last year. The positive crop conditions continue to weigh on wheat markets.
  • Canadian all-wheat plantings may rise 13 percent to 24.3 million acres in 2012, according to Statistics Canada’s initial forecast of 2012 planting intentions released Tuesday. The report surprised trade experts who had estimated plantings at 23.4 million acres. Farmers attributed the increased planted area to dryer conditions and higher prices following the dissolution of the Canadian Wheat Board monopoly. In addition to near perfect planting conditions in the U.S., the Canadian forecast added pressure to the U.S. spring wheat market.
  • In a report released Thursday, the International Grains Council (IGC) cut its 2012/13 global wheat production forecast to 676 MMT, 5 MMT lower than its previous estimate and well below the prior season's 695 million. IGC cited diminished crop prospects in the European Union for the decrease. IGC estimated global 2012/13 wheat consumption at 680 MMT, down from the prior season's 684 MMT, and estimated ending-stocks decreased 4.0 MMT from 2011/12 to 206 MMT.
  • The Baltic Panamax index closed sharply higher for the second week in a row at 1,738, up from 1,487 last week. The index has closed higher for 13 consecutive days and gained 57 percent in the period. Demand for grain cargos from South America was strong again this week and coal and iron ore shipment to China also supported prices.
  • The ICE Dollar Index closed lower this week at 78.76, down from 79.31 last Friday. The weaker dollar supported wheat markets Thursday and Friday.

File Name
PR 120427.pdf
PR 120427.xls
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