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March 19, 2010

(See attached file: PR 031910.pdf) (See attached file: PR 031910.xlsx)

Highlights:
  • Futures prices traded higher this week, with prices reaching a 2 week high, pushed up by bullish outside markets, concerns over winter weather on the Plains, concerns over the Red River flooding in North Dakota, and the support of the low winter wheat acreage in the US. Overall, CBOT wheat futures gained 12 cents on the week, closing at $4.84/bu. The KCBT March contract was up 5 cents, to $4.92/bu, and MGEX was up 7 cents, to $5.09/bu. Soybean prices changed direction due to wet weather in the Midwest and a possible strike at Argentina's major grain port of Rosario, rose 36 cents on the week to close at $9.62/bu. Corn was also up, gaining 21 cents and closing at $3.75/bu.
  • A longer than expected winter in Russia is proving detrimental to the winter wheat crop and is likely to delay the planting of the spring wheat crop. Analysts working for SovEcon estimate that Russia will produce 56.0 MMT of wheat in 2010/11, eight percent lower than 2009/10. They also expect no growth in wheat exports over the next marketing year.
  • Japan is studying samples of Black Sea origin wheat as a possible new source of milling wheat. At this time no Japanese millers have requested that their government add any countries to their list of approved importers. Russia has stated that its goal is to export 2.0 MMT of wheat to East Asia by 2012, but many doubt it will acheive this quantity due to quality issues and the large freight distances.
  • Continued concerns over the Greek financial crisis helped push up the US Dollar Index this week. Greece's financial future remains uncertain as other European Union members haggled over allowing the International Monetary Fund to help Greece or handling the situation within the Eurozone. Greece's announced buget cuts have caused widespread protests.
  • The Baltic Panamax Index continued its rally this week closing Friday at 4337. Heavy demand for grain vessels in South America continue to support the market, though a decline in iron ore shipments is forseen in the near future. Maritime Research’s Grain Freight Index was also up, closing at 565.1. The freight market is not expected to have large growth this year due to new ships coming online.

File Name
PR 031910.pdf
PR 031910.xlsx
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