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January 3, 2011

(See attached file: PR 110103.pdf)(See attached file: PR 110103.xls)

Highlights:
  • Wheat futures traded higher this week as ongoing wet conditions in Australia and a weaker dollar supported prices. Strong U.S. export prospects also provided support as a sale of SRW to Egypt and a wheat tender by Iraq sparked an 18-cent rally in CBOT nearbys on Tuesday. Overall, CBOT nearbys reached a five-month high, gaining 25 cents from last Monday and closing at $8.05/bu. KCBT and MGEX nearbys both reached a two-year high and closed at $8.63/bu and $8.89/bu, respectively, on Monday. Ongoing dry conditions in Argentina supported soybean and corn prices for much of the week, but a forecast for rain triggered a 23-cent loss in soybean nearbys on Monday. CBOT soybean nearbys lost 2 cents from a week ago, closing at $13.70/bu. The CBOT March corn contract gained 5 cents on the week, closing at $6.20/bu.
  • Rains and flooding continue to cause problems for Australia’s wheat crop. GrainCorp, Ltd., Australia’s largest grain handler, said on Monday that severe flooding in Queensland has halted all grain transportation, potentially causing delays for several weeks. The news helped push MGEX and KCBT nearbys to a two-year high on Monday, while CBOT nearbys reached a five-month high.
  • The Buenos Aires Grain Exchange increased their 2010/11 Argentine wheat production estimate again last week due to better than expected yields. The exchange currently projects Argentina’s crop to reach 14.5 MMT, which is 1.0 MMT greater than their previous forecast. The Argentine harvest is currently 61 percent complete, down from 65 percent complete this time last year.
  • UkrAgroConsult stated that Ukraine’s 2011/12 winter wheat crop could reach 21.0 MMT, which, if realized, would be an increase 3.8 MMT from 2010/11. The consultancy is forecasting an eight percent increase in harvested area, at 6.5 million hectares, and noted that Ukraine’s current wheat conditions are slightly above last year’s, with 55 percent of the crop rated in good condition.
  • A weaker dollar provided strength to wheat prices this past week. A sharp drop in the ICE Dollar Index, which fell two percent on the week, sparked a 9-cent rally in the CBOT March wheat contract on Friday. The index stood at 79.15 on Monday, down from 80.37 a week ago.
  • Maritime Research’s General Freight Index was down slightly this week, falling from 462.5 a week ago to 459.7. Their Grain Freight Index was unchanged, at 546.6.

File Name
PR 110103.pdf
PR 110103.xls
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