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September 1, 2006

Highlights
Futures markets continued up as speculative funds bought on tight world supplies and strong (potential) import demand. This "anticipatory rally" has largely been untested as buyers are balking at high prices. CBOT nearbys up 23 cents/bu, KCBOT up 11 cents, MGE up 9 cents

All basis offers quoted over the December (Z6) futures

Despite stronger US cash prices, most export competitors are pricing even higher. EU prices way up on French quality fears. With some grain in the bin, Canada has decided to get competitive. Sales to EU-25 (Italy, Spain) currently down 30% from last year with Canada back in that market

SRW basis premiums up on lack of country movement. Importers not deterred with sales steady to Nigeria and Mexico -- although Egypt passed on its tender last week. Corn harvest is the focus in the Gulf, taking rail cars and bidding away barges. SRW basis stronger than last week and traders are looking for it to move up to compete with corn movement. Corn nearbys in the Gulf trading at 75 over the September CBOT today

Barge rates have moved sideways for 6 weeks now at strong values. Traffic closures in both the Mississippi and Ohio this week did not push rates up. Dredging and Hurricane Ernesto will allow increased vessel capacity, hopefully capping prices. Minneapolis to NOLA at $36/MT, Cincinnati to NOLA $26/MT

Rail rates continuing up on tight capacity, still taking grain demand away from barges

The durum price range has tightened and moved lower, $5.28 to $5.55/bu ($194 to $204/MT). CWB pricing very aggressively into select markets

Another week of strong futures and basis prices have pushed SRW cash values to even larger premium over SW. Up from 20 cents/bu ($7/MT) last week to 33 cents/bu ($12/MT) today

After easing slightly last week, Ocean freight rates bounced back, tacking on $4/MT on many Gulf origin vessels and $2/MT off the PNW


(See attached file: PR060901.pdf)(See attached file: PR060901.xls)

File Name
PR060901.pdf
PR060901.xls
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