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August 31, 2012


(See attached file: PR 120831.pdf) (See attached file: PR 120831.xls)

Highlights:
  • Wheat markets closed higher this week thanks to the largest single-day gains in more than six weeks on Wednesday. The markets posted losses on the other four days. Heavy rains and a weaker corn market pressured prices on Monday and Tuesday. The mid-week spike was a result of speculation that Russia would impose some type of export restriction or tariff in a meeting on Friday. Markets fell sharply on Friday when Russia announced it does not intend to implement any controls. The MGEX September contract posted the largest gain of the three nearby wheat contracts, up 13 cents to $9.32/bu. KCBT September gained 5 cents to $8.81/bu and CBOT September wheat closed up 3 cents at $8.70/bu. CBOT September corn gained 2 cents to $8.03/bu and CBOT September soybeans closed at $17.65/bu, a 27 cent gain.
  • Heavy rain showers, some because of Hurricane Isaac, provided relief to parts of the drought-stricken central United States this week. The moisture is expected to improve wheat planting conditions.
  • On Friday, Russian officials cut estimated 2012/13 wheat production from 45.0 MMT to a range of 40.0 to 42.0 MMT and total estimated grain harvest from 75.0 MMT to a range of 70.0 to 75.0 MMT. The Deputy Prime Minister said that Russia will not limit grain exports even if its exportable surplus is exhausted. In recent weeks, wheat markets have reacted to speculation that Russia will implement some type of control on grain exports as happened in 2010/11 when grain supplies fell to similar levels. Total Russian wheat harvest in 2010/11 was 41.5 MMT and total grain harvest was 61.0 MMT.
  • The Baltic Panamax Index closed at 735, down from 828 last week. Lower iron ore demand in China has greatly reduced overall freight demand, forcing the index lower. Maritime Research's Grain Freight Index declined from 501.5 to 501.0.
  • The ICE Dollar Index declined this week from 81.60 to 81.22 on Friday.

File Name
PR 120831.pdf
PR 120831.xls
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