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November 18, 2011


(See attached file: PR 111118.pdf) (See attached file: PR 111118.xls)

Highlights:
  • All three wheat futures contracts closed lower this week in what was a bearish week for commodities in general. The ongoing European debt crisis continues to affect markets and poor weekly US wheat exports added pressure to prices. The CBOT December contract lost 22 cents to close at $5.98/bu, its lowest level since June 30. KCBT and MGEX each lost 28 cents on the week to close at $6.69/bu and $9.17/bu, respectively. The CBOT nearby corn contract finished 35 cents lower than last week at $6.10/bu and the CBOT Soybeans contract was flat at $11.68/bu.
  • The EU’s soft wheat harvest will rise nearly five percent in 2012 to 135.8 MMT, according to French analyst group Strategie Grains. In its first estimate for the 2012 crop, the group forecast EU all wheat production at 145 MMT, up from 138 MMT in 2011. The increase is mainly a result of higher average yields, which fell in 2011 due to adverse weather in several regions. The report forecasts world wheat production will rise to 694 MMT next year, up 13 MMT from 2011. In addition to the larger EU crop, Strategie Grains expects the U.S. and Russia to contribute to the production increase. It estimates U.S. wheat harvest will rise 3.2 MMT to 57.6 MMT and Russian production to increase 3.3 MMT to 59.3 MMT in 2012.
  • In its first 2012/13 supply estimates released this week, U.S. analyst group AgResource predicts global wheat production will stay nearly flat next year at 682 MMT, down from 683 MMT this year. According to the report, EU production will fall to 135 MMT, Russian output will drop to 57 MMT and the Ukraine crop will decrease to 18.5 MM. The group expects U.S. production to rise to 56.1 MMT.
  • The Argentina Agriculture Ministry cut its estimate for 2011/12 wheat production to 12.0 MMT, down from 12.6 MMT last month. The USDA lowered its estimate for Argentine output this month to 13.0 MMT, down from 13.5 MMT in October. Consistent wet weather has hurt production.
  • U.S. export sales fell below expectations for the 3rd week in a row, adding pressure to markets on Thursday. USDA reported net sales of 317,100 MT for the week ending November 10, up 6 percent from the previous week but below trade estimates of 350,000 to 450,000 MT.
  • The U.K.’s estimated 2011 wheat harvest is 15.4 MMT, up 3 percent from last year, according the U.K. farm ministry. In a report released Wednesday, domestic consumption was flat at 13.7 MMT, where a 4 percent decline in human/industrial demand to 6.91 MMT offset a 5 percent increase in feed use to 6.45 MMT.
  • The Baltic Panamax index rose this week due to increased vessel demand in response to high Asian coal demand. The index closed at 1,831 on Friday, up from 1,761 last Thursday.
  • The ICE Dollar Index gained for the second week in a row this week. The index stood at 78.49 on Friday, up from 78.17 last week.

File Name
PR 111118.pdf
PR 111118.xls
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