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June 18, 2010

(See attached file: PR 100618.pdf)(See attached file: PR 100618.xls)

Highlights:
  • Further delays in Canadian spring wheat plantings continued to be a bullish factor in the wheat markets, along with news of a 990,000 metric ton import tender from Saudi Arabia. A weaker dollar and better-than-expected export sales data from the U.S. also supported prices. MGEX, the spring wheat futures market, made the largest gains on the week, closing Friday 36 cents higher than last week at $5.38/bu. CBOT nearbys were up 21 cents, to $4.61/bu, while KCBT nearbys were up 30 cents on the week, to $4.97/bu. Soybean sales to China supported CBOT soy nearbys, with the July contract gaining 14 cents on the week to close at $9.61/bu. CBOT corn was also up, gaining 11 cents from last Friday and closing at $3.60/bu.
  • The Canadian Wheat Board (CWB) announced last Friday that between 8.25 million and 12.5 million acres would go unplanted in western Canada due to rainfall in recent weeks. The CWB currently pegs planted area for western Canada at 19.15 million acres, which would be the lowest planted area since 1971. CWB forecasts western Canada’s production, which accounts for nearly 90 percent of total Canadian production, at 18.9 MMT. USDA currently projects all Canadian production at 24.5 MMT.
  • The Australian Bureau of Agricultural and Resource Economics (ABARE) released their latest crop production estimates, projecting 2010/11 Australian wheat production to reach 22.1 MMT. If realized, this would be a two percent increase from ABARE’s 2009/10 estimate of 21.7 MMT. USDA currently projects 2010/11 Australian production at 22.0 MMT.
  • In their latest report, Strategie Grains reduced its 2010/11 soft wheat output estimate by a combined 1.2 MMT in the United Kingdom, France, and Ireland due to dry growing conditions. However, this reduction was more than offset by an increased outlook for Bulgaria and Romania due to favorable crop conditions. Strategie Grains’ EU soft wheat production estimate for 2010/11 stands at 133.1 MMT, up from 133.0 MMT last month.
  • Informa Economics released their 2010 acreage update on Friday, maintaining their spring wheat estimate at 13.5 million acres, which falls below USDA’s estimate of 13.9 million acres. Informa pegged durum acreage at 2.6 million acres, which is 18 percent greater than USDA’s March estimate of 2.2 million acres.
  • Better-than-expected U.S. export sales data provided support to prices this week. USDA reported U.S. commercial sales for the week ending June 10 at 959,500 metric tons, which exceeded trade expectations of 200,000 to 350,000 metric tons. Increases were reported for Mexico (132,483 HRW, 25,106 HRS, 38,731 SRW), Peru (140,000 HRW), Japan (12,150 HRW, 61,470 HRS, 24,960 white), Nigeria (70,500 HRW, 15,000 white, 8,353 durum), South Korea (6,990 HRW, 10,420 HRS, 68,376 white), Indonesia (51,000 HRW, 10,000 white), and unknown destinations (28,400 HRW, 500 HRS, 12,000 SRW, 6,430 white).
  • The Dollar ICE Index has steadily dropped over the past two weeks. After reaching over a one-year high of 88.41 on Monday of last week, the index has fallen three percent and stood at 85.67 as of Friday.
  • Freight rates continue falling, with the Baltic Panamax Index down to 2,980, an 11 percent drop from last week and its lowest level since mid-October of last year.

File Name
PR 100618.pdf
PR 100618.xls
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