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March 25, 2011

(See attached file: PR 110325.pdf)(See attached file: PR 110325.xls)

Highlights:
  • Wheat futures traded higher again this week after beginning the week lower. Profit taking and a rainy forecast for the Great Plains pushed futures prices down on Tuesday and Wednesday. However, with most of the precipitation occurring in the eastern and northern Plains, and missing the drier western and southern Plains, concerns over the poor HRW conditions prevailed. Both the CBOT and KCBT May contract gained 10 cents on the week, closing at $7.33/bu and $8.55/bu, respectively. The MGEX May contract gained 13 cents, closing at $8.81/bu. Ongoing rumors that China bought U.S. corn, along with a possible confirmation of such rumors with USDA reporting a sale of 1.25 MMT to unknown destinations, were supportive to corn prices. The CBOT May corn contract gained six cents this week, closing at $6.89/bu. Profit taking sent soybean prices lower, which lost four cents this week, to $13.58/bu.
  • The Food and Agriculture Organization (FAO) released their initial 2011/12 wheat production forecast. The FAO projected the 2011/12 global wheat crop at 676 MMT, a three percent increase from 2010/11. The increase is largely due to an expected rebound in Black Sea production following last year’s severe drought. The FAO currently projects the 2011/12 U.S. wheat crop at 56.6 MMT, consistent with USDA’s projection presented at their annual Outlook Forum last month.
  • The International Grains Council (IGC) released their March projections this week. The IGC currently projects 2011 world wheat harvested area to reach 225 million hectares, a four percent increase from last year and the highest since 1998. IGC projects 2011/12 world wheat output at 673 MMT, up 24 MMT from 2010/11 and the third largest crop on record. IGC anticipates global wheat consumption to set a record for the fourth consecutive year, climbing by 9.0 MMT to 671 MMT in 2011/12.
  • Ongoing dry weather in the Great Plains continues to hamper HRW crop development and cause concerns over this year’s production potential. Crop conditions declined this week for Texas, Oklahoma, and Colorado. Texas reported 14 percent of this year’s HRW crop in either good or excellent condition, compared to 18 percent last week. Winter wheat in good or excellent condition fell from 27 percent to 24 percent in Oklahoma and from 19 percent to 13 percent in Colorado. Kansas crop conditions improved slightly, by one percentage point from a week ago, with 27 percent of the HRW crop reported in good to excellent condition.
  • A weakening dollar early in the week supported prices as the ICE Dollar Index fell to a 15-month low on Monday at 75.40. The dollar gained strength late in the week, however, contributing to a 6-cent decline in CBOT nearbys on Friday. The index stood at 76.21 on Friday, up from 75.72 a week ago.
  • The Baltic Panamax Index (BPI) was down slightly from last week, closing at 2,078 compared to 2,094 a week ago. Maritime Research’s Grain Freight Index was also down this week, falling from 549.5 a week ago to 546.8 this week.

File Name
PR 110325.pdf
PR 110325.xls
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