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September 21, 2012

(See attached file: PR 120921.pdf) (See attached file: PR 120921.xls)

  • All three wheat futures markets closed lower this week despite very little new fundamental news. Futures fell sharply on Monday and Tuesday mostly on long-liquidation selling. Much needed rain in dry wheat areas of Australia and weakness in the corn market added to market pressure. Buyers took advantage of the lower prices on Wednesday and the increased interest pushed prices higher. Pressure from a stronger U.S. dollar offset support from increased U.S. export demand on Thursday, dropping all three nearby contracts by two cents. On Friday, renewed speculation of a Russian export ban pushed prices higher. The CBOT December wheat contract lost 27 cents on the week to close at $8.97/bu. The KCBT December contract closed down 22 cents to $9.26/bu and MGEX December finished 20 cents lower at $9.58/bu. CBOT December corn lost 34 cents to $7.48/bu and CBOT January Soybeans dropped $1.18 to $16.22/bu.
  • Movements in wheat futures followed corn futures very closely in the first half of 2012. While corn has influenced wheat on several days in the past month, wheat has started to move more independently. Since Aug 24, CBOT December Corn is down 7% from $8.07/bu. In that same period, all three December wheat contracts gained between 1-3%.
  • Russian Economy Minister indicated on Friday that the country might curb grain exports if domestic prices continue to rise. In recent months, the Russian government has repeatedly insisted there would be no embargo in calendar year 2012. The government also announced this week that it will import wheat from neighboring countries, if necessary, in order to maintain minimum supply.
  • USDA reported weekly export sales of 488,900 MT, which fell within trade expectations and up 28 percent from last week. Total known outstanding sales and accumulated exports marketing year 2012/13, through September 13, 2012 are 12.3 MMT, 11 percent lower than last year's year-to-date total of 13.8 MMT.
  • The Baltic Panamax Index fell 11 percent from 527 last week to 467 on Friday. The index has fallen 70 percent in 2012. A wave of new shipping vessels and lower global demand is weighing heavily on the market.
  • The ICE US Dollar Index closed firmer this week at 79.40, up from 78.84 last Friday.

File Name
PR 120921.pdf
PR 120921.xls
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