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October 1, 2010

(See attached file: PR 101001.pdf)(See attached file: PR 101001.xls)

Highlights:
  • Wheat prices were sharply lower this week as favorable weather conditions prevailed across many wheat-producing areas. Warm weather across North America allowed the harvest to advance in Canada and winter wheat planting to progress in the Great Plains, while the Black Sea region received beneficial rainfall needed for this year’s planting campaign. Spillover from the corn markets following a bearish grain stocks report also weighed heavily on wheat prices. The CBOT December contract reached a new one-month low during the week and lost 65 cent from last Friday, falling to $6.55/bu. KCBT nearbys fell by 67 cents, to $6.89/bu, and MGEX lost 56 cents, to $7.06/bu. Corn and soybean prices also suffered heavy losses as USDA’s grain stocks estimates exceeded trade expectations. CBOT corn fell 56 cents, to $4.65/bu, and soybean nearby prices fell 69 cents, to $10.57/bu.
  • USDA released their quarterly grain stocks report this week. USDA estimated wheat stocks stored in all positions as of September 1, 2010 at 67.0 MMT, up 11 percent from a year ago. Off-farm stocks stood at 44.4 MMT, up 19 percent from last year. Corn stocks in all positions totaled 43.4 MMT, which exceeded trade expectations and is 2 percent greater than a year ago. Soybean stocks were also higher than last year, by 9 percent at 4.1 MMT.
  • In their Small Grains Summary, USDA projected 2010/11 U.S. wheat production at 60.4 MMT, down 2 percent from last month’s official estimate. The U.S. wheat yield reached a record 46.7 bushels per acre, up 4 percent from the previous record set in 2008/09.
  • Recent rains in Argentina have benefitted this year’s wheat crop, according to the Buenos Aires Grain Exchange. The Exchange said Argentina’s wheat crop would reach a minimum of 11.3 MMT, which compares to USDA’s current estimate of 12.0 MMT. If realized, it would be Argentina’s largest crop since 2007/08, but still 2 percent below their five-year average.
  • Warm weather across western Canada helped the wheat harvest this week. The provincial government of Saskatchewan reported the spring wheat harvest at 16 percent complete and the durum harvest at 12 percent complete. Total crop harvest stands at 29 percent complete, up from 18 percent a week ago; however, still well behind the five-year average of 75 percent.
  • Commercial sales fell below trade expectations this week. Sales reached 630,800 MT but were down 34 percent from the previous week and below trade estimates of 650,000 to 850,000 MT. Increases were reported for Egypt (123,932 HRW), Turkey (49,446 HRW, 31,884 HRS, 750 durum), the Philippines (400 HRW, 31,480 HRS, 45,569 white), Italy (79,081 HRS, -7,034 durum), Indonesia (10,000 HRW, 10,000 HRS, 41,000 white), and Taiwan (38,020 HRS, 13,980 white).
  • Freight rates were lower this week due to slowing demand as China begins a one-week national holiday. The Baltic Panamax Index fell to 2,412, down 11 percent from last week. Destination routes were also lower, with Gulf/Japan at $61/mt and PNW/Japan at $32/mt.

File Name
PR 101001.pdf
PR 101001.xls
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