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March 18, 2011

(See attached file: PR 110318.pdf)(See attached file: PR 110318.xls)

Highlights:
  • Wheat futures traded higher this week in what was volatile week for prices. Concerns over Japan and the global economy, along with a strengthening dollar, pushed futures down sharply on Tuesday. However, the dollar weakened late in the week and spillover from the rally in corn prices pushed wheat prices up, posting their largest gain in five months on Thursday. Overall, the CBOT May contract gained four cents, closing at $7.23/bu. The MGEX nearby contract gained nine cents, to $8.67/bu. With ongoing dry conditions in the Great Plains, the KCBT contract posted the largest gain on the week, closing 22 cents higher from a week ago at $8.45/bu. Corn prices received a boost on strong exports sales and rumors that China might be in the market for U.S. corn. CBOT corn futures gained 19 cents on the week, closing at $6.83/bu on Friday. Heavy rainfall causing delays to the Brazilian soybean harvest supported CBOT soybean prices, which were up 28 cents from a week ago, closing at $13.62/bu.
  • Agriculture and Agri-Food Canada (AAFC) released their 2011/12 wheat projections on Friday. AAFC projected the 2011/12 global wheat crop at 670 MMT, which would be a three percent increase from 2010/11 if realized. AAFC pegged the 2011/12 Canadian wheat crop at 24.5 MMT, up six percent from 2010/11. The increase in forecasted production is due to increased planted area, which AAFC estimated at 9.1 million hectares, up seven percent from 2010/11.
  • French analyst Strategie Grains reduced their 2011/12 EU soft wheat outlook this week by 0.3 MMT, to 135.2 MMT. The reduction was primarily due to a reduced planted area in the United Kingdom and Hungary, and a reduced yield estimate in the Czech Republic. The 2011/12 EU beginning stocks estimate was also reduced, from 9.8 MMT to 8.7 MMT, due to a slight reduction in the 2010/11 production estimate (126.6 to 126.4 MMT) and an increase in the 2010/11 export forecast (18.4 to 19.0 MMT).
  • Informa Economics released their March U.S. acreage estimates on Friday. Informa projected 2011 U.S. spring wheat acreage at 14.2 million acres, down from their January projection of 14.3 million acres. Informa also reduced their 2011/12 U.S. winter wheat production estimate, by 1.9 MMT to 41.7 MMT, due to the ongoing dry conditions in the U.S. Plains. The firm raised its corn planted area projection from 90.9 to 91.8 million acres, while reducing its soybean planted area estimate from 76.7 to 75.3 million acres.
  • Strong export sales, which came in above trade expectations, contributed to the gains in futures on Thursday. USDA reported sales for the week ending March 10, 2011 at 663,700 MT, above trade estimates of 400,000 to 600,000 MT. Increases were reported for Iraq (350,702 HRW), Indonesia (51,000 HRW, 59,550 HRS, 10,000 white), Egypt (31,835 HRW, 8,500 SRW, 55,000 white), Japan (28,887 HRW, 34,917 white), Peru (60,000 HRW), and Saudi Arabia (52,250 HRW). Net sales of 195,100 MT for delivery in 2011/2012 were mainly for Nigeria (90,000 SRW), the Philippines (43,000 HRS, 20,000 white), and unknown destinations (19,600 HRW, 12,500 white).
  • The ICE Dollar Index was weaker this week, falling to its lowest point since the first week of December, 2009. The index stood at 75.60 on Friday, down from 76.78 a week ago.
  • The Baltic Panamax Index (BPI) fell this week as concerns over a possible slowing in Japanese bulk commodity imports weighed on the market. The BPI closed at 2,094 on Friday, down from 2,132 last week.

File Name
PR 110318.pdf
PR 110318.xls
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