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December 14, 2012


(See attached file: PR 121214.pdf)(See attached file: PR 121214.xls)

Highlights:
  • U.S. wheat futures fell sharply this week, principally in response to the USDA monthly supply and demand report. The report showed higher estimated world production and lower world demand, bearish news for futures markets. A strengthening U.S. dollar added pressure late in the week. Following 5 consecutive days of losses, all three nearby contracts posted gains on Friday thanks to bargain buyers. CBOT December wheat fell 5 percent (43 cents) to $8.01/bu, its lowest point since July 11. KCBT fell 5 percent (44 cents) to $8.52/bu and MGEX closed at $8.85/bu, a 4 percent (33 cent) drop. CBOT December corn dropped 14 cents to $7.19/bu and CBOT January soybeans gained 24 cents to $14.96/bu.
  • In its monthly supply and demand update, USDA increased its 2012/13 world production forecast by 3.7 MMT to 655 MMT, including a 1.0 MMT increase for Australia to 22.0 MMT. The uptick surprised analysts and sent futures down.
  • Fears that export demand may not be as high as previously thought have contributed to lower futures values. On Tuesday, USDA dropped its estimate for 2012/13 U.S. wheat exports to 28.6 MMT from 29.9 MMT.
  • The Buenos Aires Grains Exchange on Thursday cut its forecast for Argentina's 2012/13 wheat production to 9.8 MMT from 10.1 MMT due to heavy rains that flooded fields. USDA left its estimate unchanged at 11.5 MMT.
  • Extreme dry conditions persist in the U.S. plains with no relief in the forecast.
  • The Baltic Panamax Index fell from 936 last week to 839 on Friday. Uncertain demand for vessels in the Pacific Ocean is pushing the index lower. Maritime Research's Grain Freight Index fell from 500.4 last week to 495.5.
  • The US Dollar Index fell from 80.40 last week to 79.56 on Friday.

File Name
PR 121214.pdf
PR 121214.xls
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