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January 7, 2011
(See attached file: PR 110107.xls)(See attached file: PR 110107.pdf)


Highlights:
  • Futures traded lower this week as profit taking, fund rebalancing, and a stronger dollar pressured prices. The CBOT March contract fell 31 cents since Monday’s close, settling at $7.74/bu on Friday. KCBT and MGEX nearbys were also down, but flooding in Australia and ongoing concerns over quality milling wheat supplies minimized losses. KCBT nearbys fell 16 cents, closing at $8.46/bu, and MGEX lost 18 cents, closing at $8.70/bu. Corn and soybean prices were also down this week due to profit taking and a forecast for rain in Argentina, provided some much needed moisture for its corn and soy crops. CBOT corn nearbys lost 25 cents this week, closing at $5.95/bu, and soybean prices were down 12 cents, to $13.57/bu.
  • The Food and Agriculture Organization’s Food Price Index hit a record high in December. The index averaged 214.7 points last month, up from 206.0 in November and passing the previous high of 213.5 reached in June 2008. The FAO’s Cereals Price Index reached 237.6 points in December, up from 223.3 in November and the highest since August 2008.
  • Informa Economics increased its 2010/11 Argentine wheat production forecast this week. Informa now projects this year’s Argentine wheat crop to reach 15.0 MMT, up 1.0 MMT from its previous estimate. Last week, the Buenos Aires Grain Exchange increased its estimate to 14.5 MMT.
  • Dry conditions in the Great Plains continue to be a bullish factor for wheat prices. Both Kansas and Oklahoma reported deteriorating crop conditions in their monthly crop progress reports released earlier this week. Kansas reported 27 percent of its winter wheat crop in either good or excellent condition, down from 37 percent at the end of November 2010. Oklahoma’s wheat crop stood at 37 percent in either good or excellent condition, down from 44 percent in its previous report.
  • The ICE Dollar Index was stronger this week. The index hit a five-week low last week at 79.03, but rebounded this week, reaching its highest point since November 30, 2010 on Friday at 81.08.
  • The Baltic Dry Index fell to over a 20-month low this week, hitting 1,519 points on Friday, as new vessels on the market pressured freight rates. The Baltic Panamax Index closed at 1,936 on Friday, up from 1,845 on December 24, 2010.

File Name
PR 110107.xls
PR 110107.pdf
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