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October 19, 2012

(See attached file: PR 121019.pdf) (See attached file: PR 121019.xls)

  • All three wheat futures markets finished higher this week after taking a small loss early in the week. Crop friendly rain and weak export demand pressured prices Monday and Tuesday. Then mid-week a weaker U.S. dollar boosted overseas demand for U.S. commodities, including high protein HRW and HRS. USDA’s export sales report showed higher-than-expected U.S. sales on Thursday, providing support to futures markets. Wheat markets reacted positively on Friday to reports that Ukraine will officially ban wheat exports as of November 15. KCBT and MGEX December contracts each gained 18 cents to close at $9.08/bu and $9.43/bu, respectively. CBOT December wheat closed up 16 cents at $8.73/bu. CBOT December corn gained 11 cents to $7.62/bu and CBOT January soybeans closed at $15.37/bu, adding 15 cents.
  • Forecasts for dry weather key wheat-growing areas of the U.S. Plains supported prices this week. A report from the NOAA's Climate Prediction Center said this winter is likely to continue the dry, warming trend that caused devastating drought in the U.S. this year. It added that the drought is expanding westward into the Pacific Northwest.
  • Weekly U.S. export sales of 410,000 MT were up 47 percent from the previous week and exceeded trade estimates of 250,000 to 375,000 MT. Export sales failed to meet expectations the prior two weeks. Total know sales and accumulated exports of all classes of wheat for the 2012/13 marketing year, through October 11, 2012 were 13.8 million metric tons (MMT). USDA forecasts 2011/12 U.S. wheat exports to reach 31.3 MMT.
  • According to global wheat traders, Ukraine’s agriculture ministry will ban wheat exports starting on November 15. Traders have been anticipating the move for months after severe winter weather reduced domestic production. The ministry will still allow exports up to the previously set limit of 5.0 MMT. Farm Minister Mykola Prysyazhnyuk had said that Ukraine would consider imposing limits if the high level of exports threatened to push up the domestic price of bread. Ukraine last imposed export restrictions in 2010/11.
  • The Baltic Panamax Index increased slightly this week to 879, up from 871 last Friday. Increased demand to transport coal across both the Atlantic and Pacific supported the index this week. In addition, a rebound in soybean shipping in the Atlantic added support. Maritime Research’s Grain Freight Index increased from 507.8 to 513.1.
  • The ICE US Dollar Index closed lower this week at 79.69, down from 79.74 last Friday. A weaker dollar supported wheat futures mid-week.

File Name
PR 121019.pdf
PR 121019.xls
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