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September 7, 2012
(See attached file: PR090712.pdf) (See attached file: PR090712.xlsx)

  • Despite a fall in prices the first half of the week, futures rallied in the latter half to have overall gains over the shortened Labor Day week. Rains across the winter wehat belt, technical selling, and profit taking pushed wheat futures downward. But after Wednesday concerns over overall wheat supplies helped spur the markets back upwards. The Chicago contract gained 15 cents on the week to end at $8.85, the Kansas City contract gained 18 cents to close at $8.99, and the Minneapolis contract rose 9 cents to end the week at $9.41. Soybean futures moved downward 33 cents this week, due to speculation that beneficial rains will boost yields, closing at $17.32. Corn futures fell 8 cents this week to $7.95. Many buyers feel that damage from the drought is already built into the market and the corn market is technically over bought.
  • Grain export terminals along the Louisiana Gulf remained largely closed this week after most sustained minor damage from flooding caused by Hurricane Isaac. All grain elevators are expected to be back in operation by next week. Hurricane Isaac also brought beneficial rains across the Midwest and Great Plains.
  • Concerns over the world wheat supply continue to grow with many traders expecting Russia to implement some kind of export curb by the end of the calendar year, despite promises by the Russian government not to do so. Other major exporters also entered the spotlight this week. Ukraine's government and the country's grain traders made an informal agreement to limit grain exports. Flooding in Argentina is causing damage in the country's number one wheat growing state of Buenos Aires. Drought conditions are cutting production and export expectations for Western Australia. Traders are expecting many buyers to depend on North American wheat supplies late in the marketing year.
  • The Baltic Panamax Index fell from 735 to 599 points this week, reaching its lowest level since January of 2009. Economic slowdown in several key shipping markets combind with a glut of new ocean going vessels is taking its toll on the world shipping industry. Maritime Research's Grain Freight Index remained unchanged at 501.0.
  • The ICE US Dollar Index continued to fall this week, moving downward 0.99 points to 80.23, its lowest point since May of 2012. The outlook for the US economy continues to deteriorate with persistent weakness in the labor market. As well there has been a recent surge in the euro.

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