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July 15, 2011

(See attached file: PR 110715.pdf)(See attached file: PR 110715.xls)

  • Futures prices were higher this week following the release of the USDA World Agricultural Supply and Demand Estimates (WASDE) on Tuesday. USDA projected 2011/12 US wheat ending stocks at 18.2 MMT, falling below trade expectations of 19.1 MMT. Spillover from strength in corn prices also pushed prices higher. The CBOT September contract gained 43 cents from a week ago, closing at $6.94/bu, while KCBT nearbys gained 37 cents, closing at $7.64/bu. Gains in the HRS contract were limited by improving weather conditions in the US Northern Plains. The MGEX September contract gained six cents from last Friday to close at $8.23/bu. Corn prices were higher this week after USDA projected the US 2011/12 corn ending stocks at 22.1 MMT, below trade estimates of 25.2 MMT. Hot temperatures in the US Corn Belt also supported prices. The CBOT September corn contract gained 59 cents this week, closing at $7.01/bu. Soybean prices were also higher due to spillover from corn and hot weather conditions. The CBOT August soybean contract closed at $13.85/bu, up 39 cents from last week.
  • In its July WASDE report, USDA reduced its 2011/12 global wheat production forecast by 1.9 MMT from last month to 662 MMT. The decrease was primarily due to reduced production estimates for Canada and Ukraine, which fell by 3.5 MMT and 1.0 MMT, respectively, to 21.5 MMT and 18.0 MMT. Projected EU production climbed by 0.6 MMT to 132 MMT and projected US output climbed by 1.3 MMT to 57.3 MMT. USDA also increased the 2011/12 US export outlook, from 28.6 MMT to 31.3 MMT.
  • French analyst Strategie Grains increased its 2011/12 EU soft wheat production outlook. The firm raised its projection from 125.6 MMT last month to 130.2 MMT due to beneficial rainfall received in late June. Projected production for France and Germany, the EU’s top wheat producers, currently stands at 33.5 MMT and 24.5 MMT, respectively.
  • China’s National Grain and Oils Information Center pegged China’ s 2011/12 wheat output at 116.8 MMT this week, up by 1.6 MMT from a year ago. USDA currently projects China’s wheat production at 115.5 MMT.
  • HRS FOB basis for 13.5% and 14.0% protein out of the PNW were both higher this week due to ongoing logistical problems caused by flooding in the Northern Plains. HRS 13.5% basis for nearby delivery was up from $2.40/bu last week to $2.80/bu this week.
  • The ICE Dollar Index climbed sharply higher on Monday, contributing to a 12-cent loss in the CBOT September contract. The dollar fell later in the week, however, and provided support to commodity prices. Overall, the ICE Dollar Index was up only slightly from last week, climbing from 75.17 last week to 75.20 on Friday.
  • Freight rates were lower this week due to weakening demand for iron ore. The Baltic Panamax Index fell from 1,684 last week to 1,578 on Friday. Maritime Research’s Grain Freight Index was also lower, falling from 559.2 last week to 555.9.

File Name
PR 110715.pdf
PR 110715.xls
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