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May 15, 2009

(See attached file: PR 090515.pdf)(See attached file: PR 090515.xls)
Futures traded mixed this week as MGE contracts gained on the KCBT and CBOT amid continued delays in spring wheat planting. For the week, July CBOT wheat futures finished 14 cents/bu lower, KCBT was off 3cents/bu and MGE ended 5 cents/bu higher at $7.05/bushel. Soybeans closed the week up 19 cents/bu at $11.30/bushel while corn finished 4 cents/bu lower at $4.17/bushel.

· USDA reported that 46 percent of the winter wheat crop was rated good to excellent condition, down 1 percent from the previous week. Spring wheat planting was 35 percent complete, up from 23 percent last week but well below the five year average of 78 percent. To date the spring wheat crop is 13 percent emerged, also well below the five year average of 38 percent.

· The US Department of Agriculture released their monthly World Agricultural Supply and Demand Estimates for the marketing year 2009/10 on Tuesday. After reaching a record of $6.85 per bushel, average farm gate prices are expected to fall between $4.70 to $5.70 per bushel. Global production is estimated to be fall 4 percent, from 682.7 MMT to 657.6 MMT. Despite production being down, global ending stocks are expected to rise 9 percent, from 167 MMT to 181.9 MMT.

· The US dollar was highly volatile in the past week, rallying on Wednesday after reaching a 4-month low on Tuesday. There was a sense of optimism towards the global economy after strong UK retail sales data, causing the euro to gain against the dollar. However, this optimism was short lived following the news of rising US jobless claims and a decline in US retail sales. This news boosted demand for the dollar as investors became more risk adverse.

· In international developments, Egyptian officials seized all wheat imports from Russia, totaling 52.5 TMT, based on concerns that the wheat was inedible. Reports indicated that the Russian wheat had entered port without proper quality control approvals. Pakistan announced that it is unlikely to export wheat this year, despite having a 2.0 MMT surplus above domestic demand. Pakistani officials made the decision in order to protect the domestic flour milling industry and benefit from the added value of wheat product exports. India plans to allow 2.0 MMT of wheat exports following the conclusion of its election process this Saturday. India had banned wheat exports in early 2007 to build up domestic supply.

· Freight indices continued to rise as the Baltic Panamax index closed at a 2009 high of 2,474, up 15 percent from the previous week. The Atlantic/Gulf to Asia component of the BPI was up 16 percent from the previous week to 29,398 while the Pacific/Asia component was 10 percent higher at 15,428. Rising freight costs in 2009 have primarily been driven by growing demand for goods in China.

File Name
PR 090515.pdf
PR 090515.xls
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