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August 11, 2006

Futures prices much weaker than last week with a big down-draft today. CBOT nearbys down 22 cents/bu, KCBOT down 32 cents and MGE down 25

WASDE report released today generally considered a nonevent by wheat merchandisers. Confirms continued tight global supply situation, particularly in major exporters with lower production forecast for the EU (down nearly 7 MMT), Canada (down 1 MMT) and Argentina (down 8 TMT). Production in the Black Sea region revised up 2 MMT

Quantity and quality concerns on European supplies, reports of rains following the harvest, have SRW FOB Gulf trading at a $19/MT discount to French Rouen

Barge rates from Minneapolis to NOLA unchanged ($37/MT), still higher than rail rates ($33/MT). Ohio river barge rates stronger on low water levels and movement of corn, soybean and SRW

SRW nearby basis up 13 cents/bu ($5/MT) this week

Rail rates, already high, exacerbated by floods in Texas keeping Mexican trade on ocean vessels rather than track

The durum price range stronger, $5.06 to $5.66/bu ($197 to $227/MT). Exports still testing levels at the lower end with the domestic market bidding up higher qualities

PNW white wheat maximum protein specification premium stronger due to higher new crop protein average

DNS sales to the EU remain slow, still working through stocks acquired last fall. 1 ppm DON premium range down to 5 to10 cents/bu

SRW and SW nearby cash values at parity this week

Ocean freight rates moved up again this week, especially in the Atlantic, despite increased capacity and lower bookings

(See attached file: PR060811.pdf)(See attached file: PR060811.xls)

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