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February 25, 2011

(See attached file: PR 110225.pdf)(See attached file: PR 110225.xls)

Highlights:
  • Civil unrest in Libya sparked major fund selling in the futures markets, sending CBOT prices down their daily limit for wheat, corn, and soybeans on Tuesday. Futures prices received support on Friday due to a strong export sales report, but overall CBOT March wheat contract was down 45 cents on the week, closing at $7.76/bu. The KCBT March contract lost 42 cents, to $8.87/bu, while MGEX lost 39 cents, closing at $9.15/bu. Losses in soybean prices were minimized by strong end-user buying and the CBOT March soybean contract lost only two cents on the week, closing at $13.65/bu. Corn prices received a boost due to strong export sales, which reached a marketing year high at 1.5 MMT for the week ending February 17. The CBOT March corn contract gained two cents on the week, closing at $7.12/bu.
  • The USDA released their updated 2011/12 crop projections this week at their annual Outlook Forum. USDA projected the 2011/12 U.S. wheat crop at 56.6 MMT, a six percent decline from 2010/11. While planted area is expected to increase by 3.4 million acres, to 57.0 million acres, the 2011/12 yield is projected to fall six percent, to 43.8 bushels per acre, from last year’s record. USDA forecasts U.S. wheat exports to reach 31.3 MMT in 2011/12, down 12 percent from this year’s estimate, but still seven percent above the five-year average.
  • The International Grains Council (IGC) released their latest crop projections this week, forecasting a slight increase in 2010/11 global wheat production. The IGC pegged global output at 648 MMT, up 1.0 MMT from last month. The increase was primarily due to greater projections for Argentina (14.5 MMT) and the EU (139.9 MMT). The IGC reduced their 2010/11 Australian production outlook by 0.5 MMT, to 24.5 MMT. For 2011/12, the IGC currently pegs global wheat output at 672 MMT, up 2.0 MMT from last month’s projection and 24.0 MMT from 2010/11.
  • Strong export sales supported futures prices on Friday, which posted over 20-cent gains in CBOT, KCBT, and MGEX nearbys. USDA reported export sales for the week ending February 17, 2011 at 1,008,300 MT, with increases reported for Egypt (118,341 HRW, 177,750 SRW, -898 white), Japan (35,543 HRW, 75,385 HRS, -11 white), Iraq (102,500 HRW), Turkey (102,500 HRW), South Korea (15,000 HRW, 33,100 HRS, 519 SRW, 31,100 white), and the Philippines (32,000 HRS, 24,700 white).
  • The CBOT corn/wheat spread narrowed considerably this week. The spread for the March contract stood at $0.64/bu on Friday, down from $1.12/bu a week ago.
  • The Baltic Panamax Index fell this week as slow cargo demand weighed on the market. The BPI closed at 1,812 on Friday, down from 2,004 from a week ago. Maritime Research’s Grain Freight Index was also down this week, falling from 548.5 last week to 542.0 this week.

File Name
PR 110225.pdf
PR 110225.xls
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