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September 15, 2006

Highlights
Futures markets fell again this week. Poor export performance* is a fundamental reason while a fall in oil prices has reportedly led to speculators exiting commodity indices. CBOT down 23 cents/bu, KCBOT down 18 cents, MGE off 20 cents

SRW basis stronger again this week as importer interest has focused on US SW and SRW. Along with Canadian Eastern SRW, they were the most competitively priced wheat in the September 13 GASC tender

Barge rates ticked back up this week. Trader perception is that rates are high now, but still have a couple of weeks before the peak hits on a bumper corn and bean harvest. A USDA transportation report* highlights the effects of low water levels on decreased capacity. Gage levels at St. Louis are 2-3 feet below average, decreasing vessel capacity by a third. Minneapolis to NOLA at $35/MT, Cincinnati to NOLA $27/MT, both up $2 from last week

At $1.02/bu ($37/MT), the spread between SRW and HRW cash values continues to decline. The spread was as high as $1.77/bu ($65/MT) in July

With the decline in futures prices, the SRW cash value premium to SW fell back to 14 cents/bu ($5/MT), from 28 cents/bu last week

Soft white wheat low protein specification premiums jumped to 40 cents/bu for 8.5% max grain

Ocean rates continue to climb with shippers scrambling for coverage going into the corn and bean harvest. Fixture prices are varying widely on a demand frenzy

"Lakers" and "saltys" in the Great Lakes are simply not available as vessels have already been fixed. Capacity is not really sufficient to cover this year's grain program

(See attached file: PR060915.pdf)(See attached file: PR060915.xls)

File Name
PR060915.pdf
PR060915.xls
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