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May 21, 2010

(See attached file: PR 100521.pdf)(See attached file: PR 100521.xls)

Highlights:
  • Futures prices were relatively flat this week, but posted modest gains late in the week as the dollar weakened after hitting a peak on Wednesday. CBOT nearbys gained 1 cent on the week, closing at $4.72/bu. KCBT performed the strongest out of the wheat markets, posting a 4 cent gain to close at $4.95/bu. MGEX was up 1 cent, closing at $5.14/bu. Corn prices received support from news that China purchased two more cargoes of corn, placing total Chinese purchases of U.S. corn at 17 cargoes. CBOT corn nearbys were up 6 cents on the week, to $3.69/bu. Soybean prices, pressured by favorable growing conditions and the prospect of a bumper U.S. crop in 2010, lost 12 cents on the week, closing at $9.41/bu.
  • The International Grains Council (IGC) increased their global wheat production estimate by 2.0 MMT in their latest grain market report released Thursday. IGC now projects 2010/11 global wheat production at 660 MMT, which is well below USDA’s forecast of 672 MMT. The increase is primarily due to favorable weather conditions in the U.S. and the Black Sea region.
  • Planting is underway in Argentina with the Buenos Aires Grain Exchange (BAGE) reporting plantings at 7 percent complete. BAGE projects total Argentine planted area for wheat at 4.2 million hectares, which would be a 26 percent increase over last year. However, the exchange noted that current weather conditions are drier than normal and additional rainfall will be needed for their projection to be realized.
  • The CME Group began tracking the CBOT July/September wheat spread as a first step in implementing their variable storage rate plan to facilitate convergence between cash and futures prices. CME will track the spread between May 19 and June 25 and increase storage rates if the spread averages 80 percent or more of full carry (the cost of carrying a commodity to next delivery month). Rates would increase from approximately 5 cents per bushel per month to 8 cents per bushel per month. On Wednesday, the spread was 143 percent of full carry.
  • The Dollar Ice Index reached a fresh 14-month high on Wednesday, climbing as high as 87.00 points for the first time since mid-March 2009. The index weakened late in the week and stood at 85.42 on Friday, down from 86.16 last week. The Canadian dollar reached a 14-week low against the dollar.
  • The Baltic Panamax Index climbed again, closing at 4,576. This is up from 4,340 from last week. Destination routes were unchanged, however, with Gulf/Japan at $73/mt and PNW/Japan at 43/mt.

File Name
PR 100521.pdf
PR 100521.xls
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