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July 27, 2012

(See attached file: PR 120727.pdf) (See attached file: PR 120727.xls)

  • Following five weeks of sharp gains, rain in some areas of the Midwest, lower than expected wheat export sales, and a round of profit taking led to three days of double-digit losses and caused wheat futures to close lower this week. A stronger dollar early in the week and favorable reports from the annual HRS tour added pressure. Markets did post two positive days on unfavorable weather forecasts for the Black Sea and drought-stricken U.S. plains and a weaker dollar. MGEX September wheat contract fell 60 cents to $9.72/bu, while CBOT fell 45 cents to $8.98/bu and KCBT closed 35 cents lower at $9.06/bu. CBOT corn dropped 26 cents to $7.99/bu and the CBOT August soybean contract closed down 73 cents at $16.84/bu.
  • U.S. commercial wheat sales of 367,000 MT last week fell short of trade estimates and pressured futures markets Thursday. Accumulated exports of all classes of wheat for the 2012/13 marketing year, through July 19, 2012 were 8.40 million metric tons (MMT), 16 percent lower than last year's year-to-date total of 10.1 MMT. USDA forecasts 2011/12 U.S. wheat exports (including donations) to reach 32.7 MMT.
  • Scouts on the Wheat Quality Council’s HRS crop tour estimated an above average yield of 44.9 bpa, up from 41.5 bpa in 2011 and up 8 percent from the tour’s 5-year average of 41.7 bpa. Scouts said early planting and advanced crop maturity has prevented the severe drought damaged that could otherwise have been caused by recent high temperatures. The favorable daily tour reports pressured HRS futures.
  • Renewed concerns of crop damaging weather in the Black Sea region supported prices on Wednesday. The Kazakhstan agriculture ministry added to concern by reducing its production forecast to 12.8 MMT, less than half of last year’s record 27.0 MMT and nearing the post-Soviet low of 12.2 MMT in 2010. The ministry expects an average yield under 14.7 bpa due to hot and dry weather damage. USDA’s latest forecast for Kazakhstan production is 13.0 MMT.
  • The Baltic Panamax Index closed at 1,031, down from 1,156 last week. Vessel supply increased the last few weeks as owners tried to capitalize on slightly higher shipping rates. However, slower steel production in China and high grain prices have caused demand to decline the last two weeks and pushed the index lower. Physical rates have remained relatively unchanged. Maritime Research's Grain Freight Index declined from 520.0 to 516.3.
  • The ICE Dollar Index declined this week from 83.57 to 82.77 on Friday.

File Name
PR 120727.pdf
PR 120727.xls
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