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April 21, 2011

(See attached file: PR 110421.pdf)(See attached file: PR 110421.xls)

Highlights:
  • Adverse weather continues to be the driving force behind wheat prices. Conditions remain very dry in the U.S. Plains, while dry conditions are also beginning to cause concerns about crop development in western Europe. The CBOT May contract gained 55 cents this week, closing at $7.99/bu. The KCBT nearby contract gained 67 cents, closing at $9.32/bu. With precipitation in western Canada and concerns that flooding may delay spring wheat plantings, MGEX nearbys were also up sharply this week. The MGEX May contract gained 62 cents, closing at $9.51/bu. China’s cancellation of soybean shipments from South America, along with spillover from wheat and a weaker dollar, pushed soybean prices higher this week. The CBOT May soybean contract gained 48 cents, closing at $13.80/bu. Corn prices were lower this week due to an improved planting weather forecast and EIA’s low weekly ethanol production estimate. The CBOT May corn contract lost four cents this week, closing at $7.37/bu.
  • The International Grains Council (IGC) released their latest wheat projections for 2011/12. The IGC pegged 2011/12 global wheat production at 672 MMT, a 1.0 MMT reduction from last month’s projection due to ongoing dry conditions in the U.S. and spring planting delays in Russia. The IGC currently pegs the 2011/12 U.S. wheat crop at 57.5 MMT.
  • USDA reported declining winter wheat conditions again this week, with ratings reported at the lowest level since 1996. USDA reported winter wheat conditions at 38 percent poor to very poor, up from 36 percent last week. Spring wheat plantings were reported at five percent complete, down from a five-year average of 12 percent and 18 percent complete this time last year.
  • The Canadian Wheat Board said on Monday that spring plantings in western Canada may be between 10 days to three weeks behind schedule this year. Many areas in western Canada received snowfall late last week and widespread snow coverage remains across the northern Prairies.
  • The Ukrainian parliament on Thursday adopted a draft law to replace the country’s current grain export quotas with export duties. According to the draft, the duty for wheat exports should not be less than $24.10/MT. For the export duties to become law the parliament will have to pass the draft a second time and the president will have to sign the bill.
  • Gulf HRW basis was firmer this week with ongoing dry weather continuing to threaten this year’s HRW crop. Stronger demand and higher rail rates were also supportive. Gulf HRW 11.0 basis was at $0.65/bu this week, up from $0.55/bu last week.
  • The U.S. dollar fell sharply this week, providing support to commodity prices. The ICE Dollar Index stood at 74.12 on Thursday, its lowest point since August 2008. The index stood at 74.83 last Friday.
  • Freight rates fell again this week as excess tonnage continues to weigh on the market. The Baltic Dry Index fell for the 18th consecutive session on Thursday, closing at 1,254, down from 1,296 a week ago. The Baltic Panamax Index was also down, falling from 1,514 last week to 1,377 on Thursday.

File Name
PR 110421.pdf
PR 110421.xls
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