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April 27, 2007
(See attached file: PR070427.pdf)(See attached file: PR070427.xls)

Highlights
The winter wheat futures roller coaster ride continued this week, especially at the CBOT where fund trading caused high volatility. Prices fell after the USDA crop progress report showed a smaller decline in crop conditions than anticipated by the trade. Tuesday's downdraft at the CBOT was erased Wednesday morning as focus returned to freeze damage when futures locked limit-up to close at the highest level since the week of Christmas. Prices fell today on news of improved weather outlook in the EU and Australia. Technical trading and corn/wheat spreading also played a role this week.

A Statistics Canada report supported stronger HRS prices with news that Canadian producers intend to plant 16% less spring wheat acres this year while nearly every competing crop will gain acreage. U.S. HRS planting delays also supported prices at the MGE. Only 14% of the HRS crop has been seeded compared to the 27% five-year average.

For the week CBOT July futures fell 2 cents/bu, the KCBT ended down 9 cents/bu while the MGE shot up 17 cents/bu. Corn futures ended 2 cents/bu up from last week. This week's Price Report shows all basis prices quoted over July delivery futures prices.

SRW basis rose this week on trader concern about freeze effects. The SW premium over SRW continues to fall, currently at $32/MT (87 cents/bu) this week, down from $55/MT a month ago.

SRW futures are now trading at a premium to HRW, the first time since 2003 and the largest premium in 17 years. The SRW premium to corn at the CBOT is $1.39/bu, down 9 cents from last week but up from 58 cents/bu on March 23.

Ocean freight rates continue ratcheting up, with rate estimates in both the Atlantic and Pacific up $3/MT this week. At $51/MT, the PNW - Japan rate is $7/MT higher than last month and $25/MT (96%) higher than April 2006. Gulf routes are more than double rates paid this month last year. Reuters reports that rates will continue to climb due to port congestion in Brazil during the peak soybean and corn export months of May-July expected to be worse than normal due to the bumper crop harvests.

Barge and rail rates continued to weaken slightly this week.

The dollar hit a record low of $1.368/euro today on news that the US economy grew at a slower than expected pace in the first quarter.

Links:
NASS Crop Progress Report:
http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-04-23-2007.pdf

Statistics Canada Seeded Acreage Report:
http://www40.statcan.ca/l01/cst01/prim11a.htm?sdi=wheat

File Name
PR070427.pdf
PR070427.xls
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