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December 21, 2012


(See attached file: PR 122112.pdf) (See attached file: PR 122112.xls)

Highlights:
  • Wheat futures fell for the third consecutive week due to moisture received in the U.S. Plains and a weak corn market. Several bullish factors limited losses. Strong export demand, including several purchases by Egypt, and an announcement that Argentina will export 1.5 MMT less than previously expected renewed supply concerns and supported markets mid-week. But overall, the shift in weather patterns and some technical selling ahead of the Christmas holiday dominated markets this week. All three March wheat futures contracts dropped 22 cents since last Friday. CBOT closed at $7.92/bu, KCBT at $8.42/bu and MGEX finished at $8.82/bu. CBOT March corn closed 29 cents lower at $7.02/bu and CBOT March soybeans fell 62 cents to $14.29/bu.
  • Since November 30, the CBOT and KCBT March contracts each fell 8 percent and the MGEX March contract dropped 6 percent.
  • The U.S. Plains region saw the first heavy winter storm of the season this week, providing much-needed moisture to the drought stricken region. Persistent dry conditions have hampered winter wheat crop conditions.
  • USDA reported strong export sales for the week ending December 13. Net sales of 651,100 MT exceeded trade estimates of 450,000 to 650,000 MT. Total known sales to date were 17.7 MMT, 7 percent lower than last year's year-to-date total of 19.0 MMT. Demand has increased significantly thanks to more competitive U.S. prices, particularly for SRW and white wheat. In the last two weeks, Egypt has more than doubled its purchases-to-date compared to last year.
  • Argentina’s Agriculture Ministry announced Thursday that it will limit exports to 4.0 MMT this marketing year, down from the previously allotted 5.5 MMT. The government is suspending all exports until the end of January in order to protect the domestic supply. Excessive rain and fungal disease resulted in a smaller than expected wheat crop.
  • The Baltic Panamax Index fell from 839 last week to 710 on Friday. The index has fallen 28 percent since November 30 when it closed at 980. Slower demand thanks to China’s economic slowdown and an oversupply of vessels has pressured the market. Maritime Research's Grain Freight Index fell from 495.5 last week to 401.2.
  • The US Dollar Index climbed from 79.56 last week to 79.71 on Friday.

File Name
PR 122112.pdf
PR 122112.xls
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