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April 20, 2012


(See attached file: PR 120420.pdf) (See attached file: PR 120420.xls)

Highlights:
  • Wheat futures closed lower this week under pressure from ample world supplies. Favorable weather conditions and positive U.S. crop progress reports added to the stress, as a potentially large crop would add to existing record supply. Lower demand for U.S. wheat because of such large world supplies is also pushing prices lower. A rally in the corn market pulled wheat prices higher on Thursday but didn’t spill over into Friday. MGEX saw the largest loss of the wheat contracts for the second week in row, down 33 cents to $7.91/bu. KCBT lost 17 cents on the week to close at $6.26/bu and CBOT closed at $6.16/bu, an 8 cent loss. CBOT May corn lost 17 cents to close at $6.13/bu and CBOT soybeans gained 1 cent to close at $14.47/bu.
  • The new crop (August forward) protein scales are based on the old crop protein scales. More accurate protein scales for new crop will start to materialize in July or after harvest begins. New crop indications were given for HRS 13.5% protein and HRW 11.5% protein.
  • Very low Mexican durum prices have pulled world durum prices lower in the last few weeks. The range of durum offers out of the Great Lakes fell from $9.80-10.34 to $9.25-10.07. The range of offers off the U.S. Gulf fell from $10.34-10.89 to $10.07-10.61. Traders said Mexico’s durum supply is getting very low.
  • In its second crop progress report of the year, USDA rated the winter wheat crop 64 percent good to excellent as of April 15, up from 61 percent last week and 36 percent last year at this date. USDA rated 10 of the crop poor or very poor compared to 38 percent last year. Spring wheat planting was 37 percent complete, a record for mid-April. The favorable reports added to over-supply worries and weighed on wheat markets Wednesday.
  • U.S. commercial wheat sales fell short of trade estimates this week with net sales of 365,900 MT, down 19 percent from the previous week and 10 percent from the prior 4-week average. Total sales for the 2011/12 marketing year, through April 12, 2012 were 26.6 MMT. USDA forecasts 2011/12 total U.S. wheat exports (including donations) to reach 27.2 MMT. Lower demand for U.S. wheat pressured prices this week.
  • The German Farm Cooperatives Association cut its 2012/13 wheat production forecast this week to 21.5 MMT from 24.2 MMT in March due to damage from the cold winter and dry conditions. If realized, however, it would be more than the weather reduced 22.7 MMT produced in 2011/12. Spain’s Agriculture Ministry said this week its wheat production could decline 25 percent from last year’s 6.90 MMT to 5.63 MMT due to drought damage.
  • The Baltic Panamax index gained 34 percent this week to close at 1,487, up from 1,110 last week. Increased demand from the South American grain harvest supported the index and rates. Physical freight rate prices did not rise as aggressively as the index but some routes did increase after several weeks unchanged.
  • The ICE Dollar Index closed lower this week at 79.31, down from 80.06 last Friday.

File Name
PR 120420.pdf
PR 120420.xls
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