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June 17, 2011

(See attached file: PR 110617.pdf)(See attached file: PR 110617.xls)

Highlights:
  • Wheat futures fell to a three-month low this week as beneficial rainfall improved crop conditions in the EU and Black Sea region. Fund selling and a firmer dollar also pressured prices. The CBOT July contract fell for five consecutive days and lost 87 cents on the week, closing at $6.72/bu. The KCBT July contract fell by 63 cents, closing at $8.04/bu, while MGEX was down by $1.02/bu from last week, closing at $8.97/bu. Fund selling and improved weather conditions pressured both corn and soybean prices, which were also down sharply this week. CBOT corn fell by 86 cents this week, closing at $7.00/bu, while CBOT soybeans lost 54 cents, to $13.33/bu.
  • French analyst Strategie Grains made a sharp reduction in their 2011/12 EU soft wheat production forecast due to the ongoing drought conditions in Western Europe. Strategie Grains reduced their projection by 6.0 MMT from last month’s forecast to 125.6 MMT. If realized, this would fall 1.0 MMT below 2010/11 production. France, the EU’s largest wheat producer, had the largest decline in projected output, falling from 36.0 MMT in May to 32.1 MMT this month.
  • The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released their quarterly crop report this week. ABARES projected the 2011/12 Australian wheat crop at 26.2 MMT, a 1.9 MMT increase from their previous projection. ABARES also increased their Australian export forecast by 3.6 MMT, to 20.1 MMT. ABARES expects total Australian wheat planted area to reach a record 14.3 million hectares, a seven percent increase from 2010/11.
  • The Canadian Wheat Board (CWB) projected all-wheat planted area for western Canada at 20.3 million acres in their preliminary 2011/12 forecast. If realized, this would be the second lowest total area since 1971. The CWB pegged western Canada’s 2011/12 all-wheat production at 20.3 MMT, down three percent from last year.
  • Informa Economics lowered their 2011 US spring wheat (not including durum) planted area forecast this week. The firm pegged 2011 spring wheat acres at 13.3 million acres, a six percent decline from last month’s projection of 14.1 million acres.
  • HRS FOB basis out of the Gulf was lower this week due to improved logistics and increased grain movement. HRS 13.5 FOB basis for nearby delivery stood at $3.00/bu on Friday, compared to $3.50/bu a week ago. HRS FOB basis out of the PNW was higher this week due to tight capacity, with HRS 13.5 basis climbing 20 cents from a week ago, to $2.80/bu.
  • The ICE Dollar Index closed higher this week after making a sharp rally on Wednesday, which contributed to over a 22-cent fall in CBOT nearbys. The index stood at 74.98 on Friday after reaching a peak of 75.75 this week, its highest point in just over three weeks.
  • The Baltic Panamax Index was down slightly this week, from 1,927 a week ago to 1,914 on Friday.

File Name
PR 110617.pdf
PR 110617.xls
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