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February 17, 2012


(See attached file: PR 120217.pdf) (See attached file: PR 120217.xls)
  • Wheat futures markets started higher Monday on strong export interest, reports of new weather concerns in the northern plains and South American and hints of a debt resolution in Greece. However, a strengthening dollar and an increase in Australia’s estimated record production number pressured prices mid-week. Markets rallied on Thursday and Friday, supported by strong export sales and news that Ukraine will limit exports. Limited demand for low protein HRS off the gulf is weighing on spring wheat FOB prices there. KCBT HRW futures contract led the way with a 17 cent gain to close at $6.90/bu. CBOT wheat gained 15 cents to close at $6.45/bu and MGEX gained 8 cents to close the week at $8.22/bu. CBOT nearby corn contract closed the week up 10 cents at $6.42/bu and CBOT soybeans closed at $12.68/bu, a 39 cent gain.
  • Ukrainian newspaper Ekonomicheskie Izvestia reported Friday that in response to a governmental request, Ukrainian grain traders have agreed to limit wheat exports to 1.7 MMT through July. The cap would limit total 2011/12 wheat exports to 4.8 MMT, or half of what Ukrainian traders had planned and below USDA’s projection of 6.0 MMT. Ukraine’s farm ministry said this week that winter kill has effected up to 3 million hectacres of winter crops, raising concerns about meeting domestic demand. The news supported world wheat prices on Friday by suggesting less export competition.
  • With winter harvest virtually complete, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) on Tuesday increased its total 2011/12 production estimate to a record 29.5 MMT and projected exports to 22.3 MMT, a 3.2 percent increase from the previous forecast. USDA did not adjust its projections for Australia in its update last week, leaving Australia’s estimated production at 28.3 MMT and exports at 21.0 MMT. ABARES estimates 75 percent of the wheat is milling grade. The announcement was bearish for wheat markets on Tuesday, adding additional stocks to existing record world wheat supplies.
  • The Baltic Panamax index closed lower again this week after posting its first weekly gain in six weeks last Friday. Freight rates remained unchanged as vessel owners wait to lock in rates, hoping for better values in coming weeks. The index closed at 949 on Friday, down from 967 last week. Maritime Research’s Grain Freight Index fell for the ninth week in a row from 503.0 to 494.0.
  • The ICE Dollar Index closed higher for the third week in a row at 79.38, up from 79.13 last Friday. The dollar’s fluctuating value this week added to volatility in wheat markets.

File Name
PR 120217.pdf
PR 120217.xls
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