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August 20, 2010

(See attached file: PR 100820.pdf)(See attached file: PR 100820.xls)

  • Wheat prices fell sharply on Monday due to profit taking and a forecast for rain in Russia. CBOT nearbys lost 38 cents on Monday, but gained 27 cents back on Thursday following rumors that Russia would have to increase grain imports this year due to this summer’s drought. Better-than-expected export sales of 1.4 MMT also provided support. The CBOT September contract closed 23 cents lower from the previous week, at $6.79/bu. KCBT nearbys lost 18 cents on the week, to $7.05/bu, while MGEX was down 14 cents, to $7.00/bu. CBOT corn prices climbed 9 cents higher this week, to $4.21/bu, following USDA’s export sales report, which listed corn sales of 2.9 MMT, the highest weekly number in 16 years. CBOT soybean nearbys fell 34 cents, to $10.09/bu, due to favorable weather and the expectations of a large soybean crop.
  • Statistics Canada released their latest crop production estimates on Friday, projecting total Canadian wheat production at 22.7 MMT, 2.2 MMT greater than USDA’s current estimate. If realized, production would be 15 percent less than last year’s crop. Of the total, 17.0 MMT is spring wheat, 3.1 MMT of durum, and 2.6 MMT is winter wheat.
  • The Ukrainian government proposed a grain export quota of 2.5 MMT for the remainder of the calendar year, but has delayed its decision on implementing the export quota until August 25. The export quota would include 1.5 MMT of wheat.
  • FOB values continue to climb due to strong export demand. Gulf HRW 11.0 basis was up from 35 cents per bushel last week to 60 cents per bushel this week. PNW HRW basis for ordinary protein was up from 30 cents per bushel a week ago to 75 cents per bushel on Friday.
  • Export sales reached a fresh 34-month high for the week ending August 12, reaching 1.4 MMT. Increases were primarily for Egypt (594,000 MT, including 275,000 MT switched from unknown destinations), Canada (275,200 MT), Mexico (173,900 MT), Italy (99,000 MT), Japan (76,000 MT), and Yemen (75,000 MT). Decreases were reported for unknown destinations (60,500 MT) and Peru (14,400 MT).
  • Freight rates continued climbing higher this week, with the Baltic Panamax Index gaining 225 points to 3,089. Gulf/Japan was at $65/mt, while PNW/Japan was at $37/mt.

File Name
PR 100820.pdf
PR 100820.xls
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