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August 3, 2007
(See attached file: PR070803.pdf)(See attached file: PR070803.xls)
Highlights
  • U.S. futures fell early in the week following European markets as weather there appeared to finally be opening for the harvest. Later in the week markets gained back much of the decline, bouncing on strong export sales and lower production forecasts in France and Canada. For the week, CBOT September futures fell 3 cents/bu, the KCBT was off 4 cents/bu and the MGE was down 2 cents/bu. Corn futures rose 6 cents.
  • U.S. analysis firm Informa Economics forecast today that U.S. non-durum spring wheat production will be 13% above last year despite an 8% decline in planted acres. This forecast indicates a 25% increase in U.S. spring wheat yields over last year. Due to the late stage of maturity, the crop was not heavily affected by poor conditions. The USDA weekly crop progress report showed a 7% decline in good to excellent conditions for spring wheat.
  • In a statement yesterday, the Canadian Wheat Board confirmed that recent heat and lack of rain have negatively affected yields. The CWB forecasts production in Western Canada at 20 MMT - including 3.9 MMT of durum - down from 21.2 forecast in June and down 4.4 MMT (18%) from last year.
  • As the HRW harvest nears completion, grain in western Kansas, the Oklahoma Panhandle, Colorado and extending up into Nebraska and South Dakota is very high quality. On the other hand, harvest quality has been highly variable in eastern Kansas, Oklahoma and Texas, the three largest HRW producing states, due to the Easter freeze and persistent spring rains.
  • Another very strong week of export sales, exceeding 1.7 MMT after 2.2 MMT the previous week, pushed the current U.S. sales pace up 77% above last year. Traders indicate that, while sales have slowed slightly, import interest remains quite firm. Some exporters have filled capacity until October.
  • Durum prices are down considerably this week on strong country movement and the harvest looming. The price range from Lakes ports range from $8.10 to $8.25/bu ($298 to $306/MT).
  • Ocean freight rates on Pacific routes reversed a 2-week slide, up $1/MT this week on Asian utility demand as well as continued congestion at coal terminals in Australia. Rates on Atlantic routes finally took a breather, falling $1/MT after climbing $19/MT (27%) in 8 weeks. The USDA Grain Transportation Report indicates current bookings for new vessel construction will increase global capacity by 37%, but the new ships only begin to come on line in 2009.
  • Near term price direction: Markets will continue to focus on uncertainty surrounding the quantity/quality of the EU harvest and conditions in the Southern Hemisphere. Argentina has had trouble with planting due to dry conditions. Australian conditions continue to improve.

National Agricultural Statistics Service Crop Progress Report:
http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-07-30-2007.pdf

USW Harvest Report:
http://www.uswheat.org/harvestReports/doc/624D009ED756C7598525732C00685F44?OpenDocument#

USW Commercial Sales Report:
http://www.uswheat.org/commercialSales/doc/1EFFF8213F2412A48525732B004A3540?OpenDocument#

USDA Agricultural Marketing Service Grain Transportation Report:
http://www.ams.usda.gov/tmdtsb/grain/2007/08-02-07.pdf

File Name
PR070803.pdf
PR070803.xls
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