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November 9, 2012
(See attached file: PR110912.pdf)(See attached file: PR110912.xlsx)
  • US wheat futures saw large gains during the first four days of this week as bad news concerning the size and quality of the southern hemisphere wheat crop and the poor condition of the recently planted winter wheat crops in the US and Russia pushed markets upward. Friday saw prices reverse direction due to the USDA estimating higher than expected world grain supplies and lowering their estimate for US wheat exports. Chicago futures closed up 23 cents per bushel at $8.87, Kansas City closed up 13 cents per bushel at $9.22, and Minneapolis closed up 11 cents per bushel at $9.51. Despite the USDA raising its estimate for corn production, corn futures lost only 1 cent per bushel to close at $7.39. Soybean futures fell 75 cents per bushel to close at $14.52 per bushel due to higher than expected production in the the US.
  • Early reports from the Australian wheat harvest report that the crop is smaller than expected in western growing regions and below average quality in the eastern growing regions. Farmers in Argentina report high frequency of disease in their wheat crop due to flooding earlier this year, causing a deterioration in overall quality.
  • The November WASDE lowered expected US wheat exports by 1.4 MMT to 29.9 MMT. Changes for other exporters included reductions for Australia (1.5 MMT); and increases for the EU (1.0 MMT), Russia (1.0 MMT), Ukraine (2.0 MMT), and India (0.5 MMT). Total world wheat trade was raised 1.8 MMT while total domestic usage was lowered 3.1 MMT, largely on reduced expectations for feed wheat use. World wheat production was lowered 1.6 MMT, including a 2.0 MMT decrease for Australia, slightly countered by small increases in non-exporting countries. Combined this resulted in an increase of 1.2 MMT in expected world ending stocks to 174.2 MMT.
  • The Baltic Panamax Index fell further this week, losing 44 points to end the week at 722. The large glut of ships on the market and continued low demand for coal shipments is keeping the market depressed. Maritime Research's Grain Freight Index fell 9.6 points to end at 503.8.
  • The US Dollar Index strengthened 0.47 points this week to close at 81.03. The rise is due to speculation that both the US and EU economies will re-enter recession, prompting investors to seek out the safe haven of the US dollar.

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