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June 3, 2011

(See attached file: PR 110603.pdf)(See attached file: PR 110603.xls)

Highlights:
  • Futures traded mixed this week, with sharp losses early in the week following the announcement that Russia will lift its grain export ban starting July 1. Chicago July wheat futures lost 37 cents on Tuesday, its largest fall in three weeks. Futures continued falling on Wednesday, but posted gains on Thursday and Friday with support from a weaker dollar and speculations that Russian wheat exports would provide limited assistance in meeting global demand. Overall, the CBOT July contract fell 46 cents on the week, closing at $7.73/bu. KCBT July futures lost 28 cents, closing at $9.14/bu. With ongoing planting delays and more rain falling this week in the Northern Plains, the MGEX July contract posted a 41-cent gain on Friday and finished the week up four cents from last Friday, to $10.60/bu. CBOT corn fell sharply on Tuesday due to spillover from wheat, but losses were limited because of planting delays. CBOT July corn lost four cents from last Friday, closing at $7.54/bu. Soybeans prices were up sharply due to planting delays and higher oil prices, gaining 34 cents to close at $14.41/bu.
  • Informa Economics reduced their 2011/12 US winter wheat production estimate by 0.5 MMT from their previous projection to 38.7 MMT, which would be the smallest winter wheat crop in five years. Their forecast included HRW production of 20.8 MMT, SRW at 11.5 MMT, and winter white at 6.4 MMT. Informa also reduced their outlook for both the EU crop, which they reduced by 5.4 MMT to 135 MMT, and the Canadian crop, which was reduced by 0.5 MMT to 27.1 MMT.
  • Russia announced it would lift its grain export ban beginning July 1, 2011, with no other measures being introduced to limit exports. Futures prices fell sharply as a result of the announcement with CBOT July wheat futures posting a 37-cent loss and Tuesday, followed by a 23-cent loss on Wednesday.
  • The Ukrainian Ministry of Agriculture lowered their 2011/12 total grain export estimate from 19-20 MMT to 15-18 MMT.
  • USDA reported spring wheat planting for the week ending May 29 at 68 percent complete, the slowest pace since 1996 and well below the five-year average of 95 percent complete.
  • The CBOT July corn/wheat spread narrowed considerably this week. The spread stood at a 61-cent premium to wheat last week and fell to a 19-cent premium to wheat on Friday.
  • CBOT/MGEX July spread stood at a $2.87/bu premium to MGEX on Friday following a 41-cent gain in Minneapolis. This is up from $2.36/bu last week.
  • The ICE Dollar Index fell to a near one-month low on Friday and provided support to commodity prices towards the end of the week. The index stood at 73.72 on Friday, down from 74.95 a week ago.
  • The Baltic Panamax Index was down slightly this week, falling 74 points to close at 1,791 on Friday. The Baltic Dry Index was up slightly from last week, closing at 1,489 on Friday, up from 1,474 a week ago.

File Name
PR 110603.pdf
PR 110603.xls
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