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June 1, 2012


(See attached file: PR 120601.pdf) (See attached file: PR 120601.xls)

Highlights:
  • Harvest pressure and growing uncertainty in global markets pushed all three wheat futures contracts significantly lower this week. A stronger dollar and much needed precipitation in key wheat growing countries added to the downward trend. CBOT took the largest loss, closing 68 cents lower at $6.12/bu. KCBT closed 63 cents lower at $6.37/bu and MGEX lost 47 cents to close at $7.40/bu. The CBOT nearby contract closed 27 cents lower at $5.52/bu and CBOT soybeans took a 38 cent loss at $13.44/bu.
  • In its weekly crop conditions report on Monday, USDA rated the U.S. winter wheat crop at 54 percent good to excellent, down from 58 percent last week and up from 33 percent last year at this time. For the second week in a row, USDA notably lowered its ratings for Kansas, the largest producer of winter wheat. USDA rated 39 percent of Kansas wheat as good to excellent compared to 43 percent last week and 52 percent two weeks ago. The percentage of wheat rated as poor to very poor increased from 16 percent to 25 percent in the two-week period. With spring wheat 96 percent emerged, USDA rated spring wheat 79 percent good to excellent, up from 74 percent last week. The declining winter wheat ratings limited the decline in the futures market, particularly at KCBT.
  • Much-needed rainfall last weekend throughout Australia's eastern grain-belt raised hopes of higher yields for the 2012/13 wheat crop as farmers finish planting. Farmers said the rain will provide top-soil moisture, supplementing good sub-soil moisture, which could allow seeds to germinate before any potential yields are lost. Despite the rains, analysts are still forecasting a smaller 2012/13 harvest of between 24.0 and 26.0 MMT as farmers move away from wheat to canola and livestock where they achieve greater returns.
  • Key grain-growing regions of Russia and Ukraine received much needed rain this week, raising hopes that drought damage to the coming 2012/13 crop will not get worse. The Russian government expects 2012/13 harvest to decrease by 7.0 from 57.0 MMT in 2011/12 and expects exports to fall by 40 percent from the record 20.5 MMT in 2011/12. Ukraine Agriculture Minister Mykola Prysyazhnyuk said this week that frosts in January and February and drought during planting season could reduce Ukraine's wheat harvest to 12.0 MMT in 2012/13, down from 22.3 MMT in 2011/12.
  • The Baltic Panamax index declined for the fifth straight week, closing at 897, down from 1,034 last week. An oversupply of vessels and lower worldwide demand continues to pressure the index.
  • The ICE Dollar Index closed higher this week at 83.06, up from 82.52 last Friday. The stronger dollar pressured wheat markets mid-week.

File Name
PR 120601.pdf
PR 120601.xls
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