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December 3, 2010

(See attached file: PR 101203.pdf)(See attached file: PR 101203.xls)

Highlights:
  • Adverse weather conditions in the U.S. and Australia pushed wheat prices up significantly this week. Dry conditions prevailed in the Great Plains, while excessive rainfall persists in eastern Australia. Strong export demand and a weaker dollar also supported prices. The CBOT December contract gained 89 cents this week, closing at $7.38/bu. KCBT nearbys gained 91 cents, closing at $8.11/bu, while MGEX nearbys gained 83 cents, to $8.17/bu. The CBOT January soybean contract gained 61 cents this week, closing at $13.00/bu, amid concerns over dry conditions in Brazil and Argentina, along with spillover from gains in wheat prices. Corn nearbys were up 20 cents, closing at $5.59/bu.
  • Statistics Canada increased their 2010/11 Canadian wheat production estimate, raising it by 1.0 MMT from their September projection, to 23.2 MMT. However, this is down nearly 14 percent from last year’s crop. Statistics Canada noted that wheat production was down significantly in Saskatchewan and Manitoba this year, with production falling by 26.4 percent and 21.3 percent, respectively.
  • Adverse weather in Australia continued causing harvest delays and concerns about crop quality. GrainCorp, Australia’s largest grain handler, said that the Australian wheat harvest is currently running up to five weeks behind schedule due to persistent rainfall in the eastern part of the country.
  • Dry conditions prevailed across the Great Plains, adding support to prices. USDA rated 47 percent of the winter wheat crop in either good or excellent condition, compared to 63 percent a year ago.
  • The Kansas City Board of Trade announced it will increase storage rates beginning with the September 2011 contract. KCBT will increase base storage rates to 6 cents per bushel per month between December and June, up from 4.5 cents per month. Between July and November there will be an additional 3-cent Harvest Storage Premium. Changes to the storage rate are subject to approval by the Commodity Futures Trading Commission.
  • Protein premiums were firmer this week in the Pacific Northwest (PNW) due to limited supply and growing concerns over Australia’s crop quality. Traders in the PNW are not making offers on DNS 14 percent protein. HRW protein premiums were also up, with FOB HRW 11.5 protein premium up from $0.70/bu two weeks ago to $0.90/bu this week.
  • SRW FOB premiums were stronger again this week, with basis for January shipment at $1.10/bu, up from $0.95/bu two weeks ago.
  • Strong export sales supported prices. Export sales reached 663,300 MT, exceeding trade estimates of 550,000 to 650,000 MT. Increases were reported for unknown destinations (73,370 HRW, 11,745 HRS, 48,000 SRW, -10,100 white), Morocco (80,000 HRW, 18,778 HRS), Jordan (75,000 HRW), Japan (68,599 HRS), Egypt (2,230 HRW, 55,000 SRW), and Malaysia (36,000 HRS, 10,000 white).
  • The ICE Dollar Index was weaker this week, falling from a two-month high of 81.20 on Tuesday. The index closed at a two-week low on Friday, at 79.44.
  • The Baltic Panamax Index closed at 2,382 on Friday, up from 2,330 a week ago. Demand for coal and recent iron ore purchases by China supported the index.

File Name
PR 101203.pdf
PR 101203.xls
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