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June 4, 2010

(See attached file: PR 100604.pdf)(See attached file: PR 100604.xls)

Highlights:
  • New contract lows were set in all three wheat futures exchanges this week. A stronger dollar, slow export demand, and expectations for a large winter wheat crop all placed pressure on prices. CBOT and KCBT nearbys fell to new contract lows each day of the week, while MGEX nearbys posted a modest gain on Thursday, only to fall again on Friday. The CBOT July contract lost 22 cents on the week, closing at $4.35/bu. KCBT nearbys were down 16 cents, to $4.65/bu and MGEX was down 13 cents, to $4.92/bu. CBOT corn was down $3.40/bu, a loss of 19 cents on the week, due to favorable weather and disappointing export sales. CBOT soy was down 2 cents, to $9.35/bu.
  • The United Nations’ Food and Agriculture Organization (FAO) released their latest global wheat crop estimate in their biannual Food Outlook report. The FAO projects 2010/11 world wheat output at 677 MMT, approximately 4.0 MMT greater than USDA’s estimate. FAO expects world trade to increase by one percent from 2009/10, to 122 MMT, and projects a one percent decrease in global ending stocks, to 194 MMT.
  • Argentina’s government announced it will grant wheat export permits for a minimum of 3.0 MMT for the upcoming year in an effort to encourage farmers to plant wheat. According to USDA, Argentina’s production fell to 14-year low at 9.6 MMT in 2009/10.
  • Informa Economics released their latest 2010/11 winter wheat production estimate on Friday, projecting the total U.S. winter wheat crop at 40.3 MMT, with HRW at 26.8 MMT, SRW at 7.7 MMT, and white winter wheat at 5.8 MMT. USDA currently estimates U.S. winter wheat production at 39.7 MMT.
  • The HRW harvest is underway in Texas and Oklahoma, although recent rains have delayed progress. The Texas Department of Agriculture reports the harvest at six percent complete, compared to 10 percent this time last year and the five-year average of 12 percent.
  • The CBOT SRW/corn spread narrowed again this week, to 95 cents/bu compared to 98 cents/bu a week ago.
  • The Euro continued its downward spiral this week, falling to a new four-year low against the dollar. The Dollar Ice Index climbed to 88.25 on Friday, its highest point since mid-March 2009.
  • The Baltic Panamax Index was lower again this week, falling to 3,878 on Friday, which is down from 4,247 a week ago. Destination rates were also lower, with Gulf/Japan at $71/mt and PNW/Japan at $41/mt.

File Name
PR 100604.pdf
PR 100604.xls
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