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January 30, 2009


(See attached file: PR 090130.pdf) (See attached file: PR 090130.xlsx)

Highlights:
  • Futures were down this week amid slow export demand and spillover pressure from soybeans. For the week, nearby CBOT futures were off 15 cents/bu, KCBT was 10 cents lower while the MGE closed down 9 cents at $6.52/bu. Corn futures were 12 cents/bu lower at $3.79/bu while soybeans closed down 29 cents/bu at $9.80/bu.
  • US export sales set a new marketing year low this week with net sales of 23.5 TMT. Had it not been for Nigeria‚Äôs 276,000 MT HRW cancellation, sales would have been at the low end of estimates at 300,000 to 500,000 MT. SW sales were notable at 167 TMT with major purchases from unknown destinations (58,000), Yemen (50,000), Philippines (31,500) and Korea (29,200). Commitments to date for all wheat classes are 82 percent of total projected exports, down from the 5-year average of 84 percent of exports committed by this date.
  • International Grains Council (IGC), in its January Grain Market Report, increased its estimate for 2008/09 world wheat production 4 MMT to 687 MMT and increased world carryover stocks 5 MMT to 155 MMT. Additionally, IGC projects 2009/10 world wheat area to decline 1 percent to 222 million hectares with the major exporting countries accounting for the majority of the reduction. As a result of projected reduced plantings and lower yields, IGC placed 2009/10 world production 36.5 MMT lower at 650.0 MMT.
  • Ag Canada is projecting 2009/10 Canadian wheat area (both durum and non-durum) 5 percent lower to 9.7 million hectares and production 13 percent lower to 25.1 MMT. Durum acres are projected down 7 percent from last year to 2.3 million hectares. Producers will likely replace the majority of the acreage with oilseeds, which are projected 4.3 percent or 357,000 hectares higher at 8.7 million hectares.
  • Texas wheat conditions deteriorated this week as extremely dry conditions continue to stress the crop. Overall, 62 percent of the crop is rated in poor to very poor condition, 30 percent is in fair condition and 11 percent is in good condition. USDA recently reported that Texas seeded 2.4 million hectares of HRW for 2009/10, the second most of any state.
  • The Baltic Panamax Index more than doubled this week moving 101 percent higher to close at 1070, but is still down more than 90 percent since May. The Baltic P2A Atlantic/Gulf Panamax index to Asia ended the week higher at 12648, while the Pacific to Asia index rose sharply to 4152. Destination rates are up slightly on the week with Handymax Gulf/Japan up $2/MT to $33/MT and Pacific/Japan up $3/MT to $20/MT.
  • The dollar continued to rise against most major currencies, gaining 9 percent against the euro this month, but traded slightly lower against the yen. The ICE dollar index oscillated all week, trading as low as 84.6 before recovering to end the week at 86.0. The ICE is now up 7 percent since mid-December and 15 percent from the July low.

File Name
PR 090130.pdf
PR 090130.xlsx
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