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November 10, 2011

(See attached file: PR 111110.pdf) (See attached file: PR 111110.xls)

  • U.S. futures markets traded mixed this week as outside financial markets mostly drove prices. U.S. Department of Agriculture released its monthly supply and demand update on Wednesday, making only slight adjustments, all within analysts’ expectations. All three wheat contracts gained early in the week in anticipation of the USDA report. The report’s release, however, was overshadowed by larger economic issues and therefore had little effect on prices later in the week. Continued concern surrounding the growing European debt crisis and a sharp strengthening of the dollar later in the week pressured prices. CBOT was down 17 cents on the week to close at $6.20/bu and KCBT lost 21 cents to close Thursday at $6.97/bu. MGEX was able to buck the downward trend due to continued tight supplies of high protein spring wheat. The nearby December contract closed at $9.45/bu on Thursday, 22 cents higher than last week. The nearby CBOT corn contract finished lower for the first time in 5 weeks, down 10 cents to $6.45/bu and the CBOT soy contract lost 54 cents on the week to close at $11.68/bu.
  • A disappointing export sales report added pressure to wheat futures on Thursday. The USDA reported commercial sales for the week ending November 3 of 298,400 MT, down seven percent from the previous week and below trade estimates of 350,000 to 450,000 MT. Increases were reported for South Korea (85,000 MT, including 55,000 MT switched from unknown destinations and decreases of 28,000 MT), the Philippines (82,100 MT), Mexico (55,800 MT), Nigeria (51,900 MT), Guatemala (28,200 MT, switched from unknown destinations), El Salvador (19,200 MT, including 14,600 MT switched from unknown destinations), and Japan (10,900 MT).
  • The United Nations Food and Agriculture Organization (UNFAO) released its updated cereal supply and demand report this week. The report increased the 2011/12 wheat production estimate from last month by 7.5 MMT to 691 MMT, a six percent increase from 2010/11. UNFAO estimates world consumption at 682 MMT, a two percent increase over last year and 3 MMT greater than last month. Estimated total world supply increased 5.9 MMT this month to 873 MMT. USDA’s current world production estimate is 683 MMT, consumption forecast is 677 MMT and supply, when calculated using UNFAO’s method, is 879 MMT.
  • France’s farm ministry trimmed the 2011 wheat production estimate this week to 34.0 MMT, down from the previous estimate of 34.1 MMT and 4.6 percent lower than last year.
  • The Baltic Panamax index fell this week due to continued low demand for vessels. The index closed at 1,761 on Thursday, down from 1,836 last Friday.
  • The ICE Dollar Index gained nearly two percent this week. The index stood at 78.17 on Thursday, up from 76.86 last Friday.

File Name
PR 111110.pdf
PR 111110.xls
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