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August 19, 2011

(See attached file: PR 110819.pdf)(See attached file: PR 110819.xls)

Highlights:
  • Wheat futures traded higher this week following the release of preliminary USDA Farm Service Agency (FSA) acreage certification data that indicated a possible reduction in the estimated 2011 U.S. wheat planted area. A weaker dollar and concerns that warm temperatures could reduce this year’s HRS yield also supported prices. MGEX futures led the way this week with the September contract gaining 84 cents to close at $9.45/bu. CBOT and KCBT nearbys were up by 28 cents and 23 cents, respectively, to close at $7.30/bu and $8.19/bu. Both corn and soybean prices climbed higher this week based on FSA data that could lead to a possible reduction in estimated planted acreage. The CBOT September corn contract gained nine cents to close at $7.11/bu, while the nearby soybean contract gained 32 cents, closing at $13.68/bu.
  • The USDA Farm Service Agency released preliminary 2011 acreage certification data on Monday. Based on the data, analysts suggest that 2011 total US wheat acreage could fall by 400,000 acres or more in October’s Crop Production Report. The data had a bullish effect on wheat prices, especially in MGEX futures, which gained 23 cents on Tuesday and another 20 cents on Wednesday.
  • The German Farm Cooperatives Association reduced its 2011/12 German wheat production forecast this week due to recent rains that have damaged crops. The association pegged Germany’s wheat output at 22.0 MMT, down from 22.8 MMT last month and down from 2010/11 production of 24.1 MMT.
  • Argentina’s Agriculture Ministry lowered its 2011/12 Argentine wheat planted area outlook this week from 4.7 million hectares last month to 4.5 million hectares as recent rains have delayed planting progress. If realized, Argentina’s planted area would be nearly three percent greater than 2010/11 planted area.
  • HRS protein spreads continue to narrow due to higher expected protein in the 2011/12 HRS crop and limited export demand for 14 percent protein. The spread between Gulf HRS 13.5 and 14.0 percent protein narrowed by 20 cents this week with 14.0 percent protein at a $0.30/bu premium to 13.5 percent, compared to $0.50/bu last week.
  • The ICE Dollar Index was down this week following a sharp drop in the dollar on Monday. The index stood at 74.00 on Friday, down from 74.60 a week ago.
  • The Baltic Panamax Index reached a ten-week high as increased Chinese demand for iron ore supported prices this week. The index stood at 1,609 on Friday, up from 1,520 a week ago.

File Name
PR 110819.pdf
PR 110819.xls
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