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June 8, 2012


(See attached file: PR 120608.pdf) (See attached file: PR 120608.xls)

Highlights:
  • All three wheat futures contracts closed higher this week on four days of positive trading. A weaker dollar and strong financial markets supported wheat all week and limited losses on Tuesday, the only negative trading day. Fast moving winter wheat harvest and excellent spring wheat conditions spurred the downturn Tuesday. MGEX had the largest gain of the week, up 28 cents to $7.67/bu. KCBT gained 19 cents to close at $6.56/bu and CBOT finished the week at $6.30/bu, an 18 cent increase. CBOT corn gained 47 cents to $5.98/bu and CBOT soybeans increased 6 percent on the week to close at $14.26/bu, an 82 cent gain.
  • Traders reported seeing a good protein range and high quality wheat in the initial deliveries of new crop arriving at country elevators.
  • In its weekly crop progress report on Monday, USDA said the winter wheat harvest was 20 percent complete, compared to 7 percent last year and the fastest pace on record. USDA reduced the percentage rated good to excellent to 52 percent from 54 percent last week. USDA rated spring wheat 78 percent good to excellent, down from 79 percent a week earlier. The reports pressured wheat markets on Tuesday.
  • On Wednesday, private analytical firm Informa Economics raised its forecast of 2012/13 U.S. winter wheat production to 45.6 MMT from its previous estimate of 45.1 MMT. The figure fell below USDA’s latest estimate of 46.1 MMT.
  • The Buenos Aires Grain Exchange said Thursday that Argentina’s new season wheat plantings are set to fall 17 percent from last year because of weather problems and farmers’ pessimism about potential profits. The grains exchange estimated 2012/13 wheat area at 3.8 million hectares (9.4 million acres), down from its previous forecast for 4.0 million hectares. Some farmers have been shifting to other crops such as barley and canola because of wheat export quotas that farmers say depress prices in the local market.
  • The Baltic Panamax index increased for the first time in 6 weeks, closing at 914, up from 897 last week. An oversupply of vessels and lower worldwide demand continues to pressure the index but an interest rate cut in China provided a boost on Friday. Maritime Research’s Grain Freight Index declined for the fifth straight week at 423.8, down from 428.3 last week.
  • The ICE Dollar Index closed lower this week at 82.56, down from 83.06 last Friday. The weaker dollar supported wheat markets all week.

File Name
PR 120608.pdf
PR 120608.xls
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