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October 24, 2008
(See attached file: PR081024.pdf) (See attached file: PR081024.xlsx)

  • Futures were sharply lower this week amid pressure in crude oil and a sharp rise in the dollar. Crude oil dropped to a 16-month low this week to settle at $64.15 a barrel, pushing prices 56 percent lower from the record $147.27 in July. Additionally, the dollar hit a two-year high against the euro, and traded sharply higher against the currencies of major competitors such as Australia, Canada and Russia. The CBOT nearby contract closed 50 cents/bu lower at $5.16/bu, KCBT closed 51 cents lower, while the MGE ended 39 cents lower at $6.02/bu. Soybeans ended the week 40 cents/bu lower and corn closed down 30 cents/bu at $3.73/bu.
  • Freight rates continued down this week with the Baltic Panamax Index closing under 1,000 for the first time in over six years, ending at 921, off 17 percent on the week. Gulf/Egypt rates are seen at $17/MT this week, down more than 70 percent from October 1, and off 85 percent from the start of MY 2008/09. Rates to Japan were slightly lower this week ending at $31/MT out of the Gulf and $17/MT from the PNW.
  • U.S. wheat export sales came in at 383,900 MT this week, down 12 percent from the previous week and 19 percent from the prior 4-week average, but at the low-end of trade estimates of 450,000 to 550,000 MT. Most of the business was winter wheat, with 162,000 MT sales of HRW and 120,000 MT of SRW. Major purchases were reported for Guatemala, Egypt, Panama, Nigeria and Mexico. For the year, SRW sales of 4.0 MMT have exceeded USDA total year forecast of 3.9 MMT.
  • U.S. farmers had planted 79 percent of the winter wheat crop, advancing six points from the previous week to keep pace with the 5-year average. In SRW country, Illinois and Ohio advanced 25 and 35 points, respectively. Sixty percent of the winter wheat acreage had emerged, 7 points ahead of last year and 2 points ahead of the 5-year average.
  • Gulf basis strengthened this week amid softening barge rates and lack of in-country selling. Nearby SRW basis is now zero, up from 30 under December futures last week, and 80 under two weeks ago. HRS basis also strengthened moving 25 cents higher to 215.
  • U.S. barge rates softened this week as demand has decreased due to the delay in corn harvest. The key Mid-Mississippi route traded 10 percent lower this week at $34/MT, pushing rates back to late August levels.

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