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January 15, 2010

(See attached file: PR 100115.pdf)(See attached file: PR 100115.xls)

Highlights:
  • After reaching a 5-week high on Monday, wheat prices fell by over 6 percent Tuesday following the release of the USDA supply and demand report. While the report was bearish for wheat, spillover from corn markets also pressured wheat prices after CBOT corn futures fell by 30 cents, the maximum daily trading limit. USDA projected a record corn crop along with an implication of more planted acres next year following a sharp decline in winter wheat acreage. Wheat prices fell by over 10 percent on the week, with CBOT nearbys falling 58 cents to $5.10/bu. KCBT nearbys were down 48 cents, to $5.12/bu and MGEX nearbys were down 54 cents, to $5.20/bu. Corn prices fell by 51 cents to $3.71/bu. Soy prices also dropped sharply, by 48 cents, to $9.74/bu.
  • USDA’s January World Agricultural Supply and Demand Estimates (WASDE) projected an increase in global wheat production to 676 million metric tons (MMT), primarily due to greater Russian output. The report also increased global ending stocks to 196 MMT and lowered the U.S. export projection to 22.5 MMT, which would be the lowest since 1971/72.
  • In their winter wheat seedings report, USDA estimated a 14 percent reduction, from 43.3 million acres to 37.1 million acres, in total winter wheat planted area. This would be the smallest winter wheat acreage since 1913. The report indicated a 12 percent decrease in HRW and 29 percent decrease in SRW plantings. Winter white wheat was down 1 percent and durum was down 33 percent. Poor weather, lower prices, and late row crop harvests all contributed to the reduced acreage.
  • USDA also released their Grain Stocks report, which indicated that wheat stored in all positions for December 2009 increased 24 percent from the same time a year ago. On-farm stocks increased 23 percent, while off-farm stocks increased 25 percent. Durum wheat stored in all position was up 70 percent from December 2008, with a 94 percent increase in on-farm stocks and 36 percent increase in off-farm stocks.
  • The Buenos Aires Grain Exchange reported the Argentine wheat harvest is 98 percent complete. Average yields thus far are up from last year, from 2.1 tons per hectare (31.2 bushels per acre) to 2.7 tons per hectare (40.1 bushels per acre). The Exchange estimates total Argentine production at 7.5 MMT, compared to 8.0 MMT by USDA.
  • The Baltic Panamax Index (BPI) was down 11 percent, to 3,745, due to slowing demand for iron ore from China. Maritime Research’s General Freight Index was also down, from 484.5 last week to 479.5 this week.

File Name
PR 100115.pdf
PR 100115.xls
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