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April 15, 2011

(See attached file: PR 110415.pdf)(See attached file: PR 110415.xls)

Highlights:
  • Large fund liquidations following Goldman Sachs’ recommendation to take profits in commodities sent wheat futures down sharply this week. A forecast for rain in the US Plains also pressured prices. CBOT nearbys posted a 38 cent loss on Tuesday and continued falling for most of the week. Overall, the CBOT May contract lost 51 cents, closing at $7.44/bu on Friday. KCBT nearbys lost 67 cents, to $8.65/bu, and MGEX nearbys lost 65 cents, to $8.89/bu. Along with profit taking, the Chinese government’s announcement to release 3 MMT of soybeans from their state reserves pressured soybean prices. The CBOT May soybean contract lost 61 cents this week, closing at $7.42/bu. CBOT corn prices were also lower, falling 25 cents from last week and closing at $7.42/bu on Friday.
  • A forecast for some much-needed rain in the US Plains pressured prices this week. Crop conditions in most HRW-producing states have been very poor due to ongoing dryness, with USDA reporting a further decline in the winter wheat condition this week. USDA reported 36 percent of the winter wheat crop in either poor or very poor condition, up from 32 percent last week.
  • Japan raised the level of the nuclear crisis at the Fukushima Daiichi nuclear plant from five to seven, the highest ranking possible. Ongoing problems with Japan’s nuclear facility following last month’s tsunami could limit Japan’s grain demand, which had a bearish effect for futures prices this week.
  • Commodity analyst UkrAgroConsult projected Ukraine’s total grain exports to double in 2011/12, reaching 24.4 MMT. This projection includes wheat exports of 11.0 MMT, which would be up from 3.5 MMT in 2010/11.
  • CBOT corn futures traded higher than CBOT wheat for the first time in 15 years this week following Tuesday’s sharp decline in wheat prices. The corn/wheat spread reached as high as a $0.14/bu premium to corn on Thursday before corn prices posted losses on Friday. The spread stood at $0.02/bu premium to wheat on Friday.
  • The Baltic indices were lower again this week as slow cargo business and excess tonnage weigh on the market. The Baltic Panamax Index fell to 1,514 on Friday, down from 1,696 last week. The Baltic Dry Index fell from 1,376 last week and reached a six-week low at 1,296 on Friday.

File Name
PR 110415.pdf
PR 110415.xls
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