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July 20, 2012


(See attached file: PR 120720.pdf) (See attached file: PR 120720.xls)

Highlights:
  • Wheat futures closed sharply higher this week, marking five consecutive weeks of gain. Weather continues to drive grain markets as U.S. drought conditions worsen. Adverse weather conditions in other key wheat producing, higher-than-expected weekly U.S. wheat sales and stronger corn futures provided support to wheat markets. CBOT September wheat gained 96 cents to close at $9.43/bu, its highest point since June 2008. KCBT gained 90 cents to $9.41/bu and MGEX closed at $10.32/bu, an 82-cent increase. CBOT September corn jumped 84 cents to $8.25/bu and CBOT August soybeans gained $1.44 on the week to $17.13/bu.
  • This week’s U.S. commercial wheat sales of 589,200 MT exceeded trade estimates of 350,000 to 500,000 MT, pushing wheat futures higher on Thursday.
  • The Rosario Grains Exchange lowered its 2012/13 planted area forecast for Argentine wheat on Wednesday to 3.6 million hectares, a 22 percent drop from 2011/12 and lower than the Buenos Aires Grain Exchange’s 3.7 million hectare estimate. The reduction added to concerns of crop shortfall around the world. USDA projects Argentina’s 2012/13 production at 12.0 MMT, a 17 percent drop from last year.
  • Concerns about damage to the wheat crop in key growing areas of the Black Sea region contributed to the strength in futures markets this week. Kazakhstan’s agriculture ministry said it expects below-average production and that nearly 10 percent of the crop is damaged or in very poor condition. The ministry expects output of 14.0 MMT, a 48 percent decline from last year and below the 10-year average of 17.0 MMT. Government officials said conditions are worsening and weather forecasts show no signs of relief.
  • The Baltic Panamax Index closed at 1,156, down from 1,202 last week. Vessel supply increased the past few weeks as owners try to take advantage of slightly higher shipping rates. However, demand has not increased at the same rate, pushing the index lower. Maritime Research's Grain Freight Index remained unchanged at 520.0.
  • The ICE Dollar Index increased this week from 83.47 to 83.57 on Friday.

File Name
PR 120720.pdf
PR 120720.xls
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