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August 10, 2012


(See attached file: PR 120810.pdf)(See attached file: PR 120810.xls)

Highlights:
  • Both the weather and corn market continue to influence wheat markets, but USDA’s WASDE report was the single largest market mover this week. After modest mid-week gains, all three wheat futures closed lower this week after sharp declines following the WASDE release Friday. Rain and cool temperatures across the Midwest pressured futures early in the week but wheat mostly followed the corn market. Strong commercial wheat sales added support to futures prices on Thursday. The MGEX September contract lost 9 cents on the week to $9.36/bu. CBOT and KCBT September contracts lost 6 cents and 3 cents, respectively, to close at $8.85/bu and $8.93/but. CBOT September corn dropped 10 cents to $8.00/bu and CBOT nearby soybeans gained 38 cents to close at $16.73/bu.
  • The WASDE estimate of 2012/13 world wheat production increased by 2.50 MMT (663 MMT), global exports by 3.19 MMT (135 MMT), world feed wheat usage by 3.76 MMT (134 MMT) and decreased the estimate of global carryout stocks by 5.27 MMT (177 MMT). USDA’s estimate of U.S. production increased by 1.20 MMT to 61.73 MMT but projected U.S. exports were unchanged at 32.7 MMT. The estimate of world corn production was slashed by 56.2 MMT to 849 MMT. USDA projects U.S. corn production will be the lowest since 2006/07 at 274 MMT.
  • U.S. commercial wheat sales of 665,300 MT last week exceeded trade estimates and supported futures markets Thursday. Accumulated exports of all classes of wheat for the 2012/13 marketing year, through August 2, 2012 were 9.58 million metric tons (MMT), 12 percent lower than last year's year-to-date total of 10.9 MMT. USDA forecasts 2011/12 U.S. wheat exports (including donations) to reach 32.7 MMT.
  • Russia’s Deputy Prime Minister said on Wednesday that Russia had no grounds to ban grain exports this year but did not rule out protective export tariffs after the end of calendar year 2012. He noted the government's grain production forecast of 75-80 MMT, with an exportable surplus of 10-12 MMT. The statements led to a 20 cent drop in wheat futures early in the Wednesday session before rallying back in the afternoon.
  • The Baltic Panamax Index closed at 814, down from 910 last week and marking 24 straight days of decline. Lower demand, particularly decreased grain activity in the Atlantic, continues to force the index lower. Maritime Research's Grain Freight Index declined from 514.9 to 512.6.
  • The ICE Dollar Index increased this week from 82.45 to 82.63 on Friday.

File Name
PR 120810.pdf
PR 120810.xls
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