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January 23, 2009

(See attached file: PR 090123.pdf) (See attached file: PR 090123.xlsx)

Highlights:
  • Futures were up and down this week but ended higher on improved export sales and concern over dry conditions in the western HRW belt. For the week, nearby CBOT futures gained 5 cents/bu, KCBT was 2 cents higher while the MGE closed up 8 cents at $6.61/bu. Corn futures were nearly flat at $3.91/bu while soybeans closed down 11 cents/bu at $10.09/bu.
  • Commercial sales for the week were within trade estimates at 410,300 metric tons (MT), up from 87,900 MT last week and more than double the previous 4-week average. HRS sales of 178,500 MT were notable with major purchases from Japan (40,042), Taiwan (55,050) and Philippines (60,000). Commitments to date for all wheat classes are 82 percent of total projected exports, down from the 5-year average of 84 percent of exports committed by this date. Not included in this week’s commercial sales report was a 356,000 MT cancellation of HRW to Nigeria. No details on the cancelation were available.
  • Argentina’s government lowered its estimate for wheat production to 8.3 MMT from 9.0 MMT last month and well below USDA’s estimate for 9.5 MMT. Dow Jones reported that the government has rejected a large number of wheat export permits to ensure domestic supply and may not allow much more than the 1.2 MMT permitted last week.
  • Ocean freight rates were slightly higher this week with PNW Asia up $1/MT and Gulf Asia $2/MT higher. Rates in the Atlantic basin are now 75% lower than year-ago levels and the Pacific is down 72%.
  • SRW basis improved this week but remained depressed with nearby FOB gulf cash prices at a 30 cent/bu discount to the CBOT.
  • The dollar continued to rise against most major currencies this week hitting a six-week high against the euro and 23 year high against the pound. The ICE dollar index finished the week at 85.6, up 2 percent from last week and 13 percent higher than this time last year.

File Name
PR 090123.pdf
PR 090123.xlsx
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