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June 29, 2007

(See attached file: PR070629.pdf)(See attached file: PR070629.xls)
Highlights
  • Wheat futures were up most of the week with reports of decreased production around the world, starting with a bullish Canadian acreage report released Tuesday. A pair of USDA reports released this morning sent markets in a volatile frenzy with SRW trading in a 50 cent/bu range today. For the week, CBOT July futures fell 10 cents/bu while the KCBT was up 26 cents/bu and the MGE rose 23 cents/bu. Corn futures were down 38 cents/bu from last week.
  • Statistics Canada released a report Tuesday estimating non-durum wheat planted acreage down 18.8% from spring 2006. The estimate of 6.2 mha, 11% lower than the March StatCan estimate, was well below trade estimates. The acreage shift from wheat to more profitable crops such as barley, canola and corn, was magnified by a wet spring that forced producers to shift to shorter growing season crops.
  • USDA's National Agricultural Statistics Service released its acreage estimates for spring planted crops this morning. NASS estimated U.S. HRS acreage at 5.1 mha, 5% below the March estimate and down 11% from last year. A dramatic fall in soybean acres pushed beans limit up. Corn area was up 1 mha from the March forecast, nearly 6 mha (19%) higher than last year. Corn belt weather has been beneficial recently, adding downward pressure on corn futures.
  • The corn/HRW futures spread for July delivery is currently $2.55/bu, up from $1.46/bu ($54/MT) three weeks ago.
  • NASS also released its estimate of current grain stocks, showing U.S. wheat stocks at 12.4 MMT, 1 MMT above trade estimates although 3.2 MMT below last year.
  • While initial reports of test weights and yields from the HRW harvest vary widely regionally, there is now little doubt that protein content is below average. HRW at higher than 11.5% protein is currently not available while discounts for unspecified protein are 20 cents under 11's.
  • The durum market has become extremely tight on increased importer interest while movement from the country remains slow. The price range was revised up 10% this week with offers on one grade from Lakes ports ranging from $7.80 to $8.10/bushel ($287 to $298/MT).
  • U.S. sales exceeded trade expectations again this week, at 622,800 MT compared to estimates of 200,000 to 400,000 MT. The sales pace remains 18% above last year.
  • Ocean freight rates soared again this week with congestion at Australia‚Äôs Newcastle port absorbing capacity. Sources say 75 vessels are waiting between 27 and 35 days to load. Brokers expect rates to continue higher with strong Chinese demand for Australian coal. Rate estimates in both the Atlantic and Pacific are up $5/MT this week after rising $3 and $5/MT respectively last week. Rates in the Great Lakes are unchanged for the second week.

Statistics Canada Planted Area Report:
http://www.statcan.ca/Daily/English/070626/d070626a.htm

NASS Acreage Report:
http://www.usda.gov/nass/PUBS/TODAYRPT/acrg0607.pdf

NASS Grain Stocks Report:
http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc-06-29-2007.pdf

USW Harvest Report:
http://www.uswheat.org/harvestReports/doc/7F68F3FBC218FED285257309005CDF3F?OpenDocument#

USW Commercial Sales Report:
http://www.uswheat.org/commercialSales/doc/33056D6CDAA9CC7285257308004CE847?OpenDocument#

File Name
PR070629.pdf
PR070629.xls
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