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September 5, 2008
(See attached file: PR080905.pdf) (See attached file: PR080905.xlsx)

Highlights
  • Futures traded lower for the second consecutive week after a sharp decline in Tuesday’s session, followed by sideways trade midweek, before a sell-off on Friday. Continued strength in the dollar and spillover pressure from outside markets contributed to the bearish tone. For the week, the nearby position at the CBOT was down 50 cents/bu, the KCBT was off 46 cents/bu and the MGE finished 58 cents/bu lower. Soybeans dropped sharply ending $1.50/bu lower while corn closed the week 37 cents/bu lower.
  • USDA reported export sales of 436,600 metric tons for the week ending August 28 pushing year-to-date sales to 15 MMT. Sales for the week were 19 percent above the previous week and exceeded trade expectations of 100,000 to 300,000 metric tons. Increases reported for Japan (23,080 HRW, 46,420 HRS, 18,000 white), Philippines (-680 HRW, 90,000 HRS, -18,629 white), Egypt (69,964 SRW), South Korea (12,800 HRW, 11,800 HRS, 39,600 white), Nigeria (28,024 HRW, 8,787 durum) and Spain (32,972 HRS) led the way.
  • The CME Group announced that it will recommend to the CFTC changes to its wheat contract to improve convergence. The recommended changes will include increasing storage rates for the July-November period, expanding delivery points and lowering the max allowable vomitoxin level to 2 ppm. Changes are proposed to start with the July 2009 contract.
  • The U.S. spring wheat harvest was pegged at 81 percent complete as of Sunday, up from 62 percent the previous week. The current harvest pace lags last year by 12 percentage points but is just three points under the five-year average. Both North Dakota and Montana have harvested 81 percent of their spring wheat crop.
  • PNW premiums remain high this week with SW harvest averaging higher than normal protein levels.
  • The dollar continued to run higher this week as it advanced to its highest level against the euro this year. The dollar moved sharply higher against the euro toward the end of the week after the European Central Bank signaled a slowdown in the euro zone economy. The dollar index closed at its highest level in 11 months.

File Name
PR080905.pdf
PR080905.xlsx
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