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December 19, 2008

(See attached file: PR 081219.pdf) (See attached file: PR 081219.xlsx)

Highlights:
  • Futures finished higher this week, aided by weather problems in the U.S. Plains and continued weakness in the dollar. Sub-zero temperatures and lack of snow cover in parts of Kansas increased the chance for winterkill in new-crop HRW. The impact of the cold on HRW production will not be known until the crop breaks dormancy in the spring. The U.S. dollar traded sharply lower early in the week following a cut in the fed funds target rate, increasing the attractiveness of dollar denominated commodities. For the week, nearby wheat futures prices at the CBOT are up 50 cents/bu, the KCBT was 45 cents/bu higher while the MGE closed 35 cents/bu higher at $6.25/bu. Soybeans ended the week up 16 cents while corn closed 7 cents higher at $3.80/bu.
  • This week’s commercial sales were at the low-end of trade expectations for 250,000 to 340,000 MT and were down 25 percent from the previous 4-week average. Sales of 262,100 MT this week pushed year-to-date total commitments to 21.2 MMT or 78 percent of USDA total year forecast.
  • The Buenos Aires Grain Exchange said 2008/09 Argentine wheat production is likely to fall below 9.7 MMT due to poorer-than-expected yields. The exchange noted that crops harvested in southwestern Buenos Aires, which produces more than half of the wheat crop, were very low due to dry weather and reduced fertilizer use. As of Friday, 70 percent of the wheat crop had been harvested, up 20 percentage points from the previous week and 15 points ahead of last year's pace.
  • The SRW/corn spread widened this week to $67/MT from $51/MT as falling crude prices limited gains in the corn market. The spread between SRW and SW narrowed $6/MT this week to $19/MT, the lowest level in 5 weeks.
  • The Baltic Panamax Index firmed this week moving 31 percent higher to close at 575. The Baltic P2A Atlantic/Gulf Panamax index to Asia ended the week 35 percent higher at 8214, while the Pacific to Asia index rose 19 percent to 3148. Destination rates are down slightly on the week with Handymax Gulf/Japan down $1/MT to $24/MT and Pacific/Japan down slightly to $16/MT.
  • The next Price Report will be published Monday, December 28.

File Name
PR 081219.pdf
PR 081219.xlsx
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