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May 27, 2011

(See attached file: PR 110527.pdf)(See attached file: PR 110527.xls)

  • Wheat futures traded higher again this week with adverse weather conditions driving prices. Wet conditions in the Northern Plains continue to hamper spring planting progress, while dry conditions in Western Europe and China are a growing concern. MGEX futures led the way, reaching its highest level in three years by gaining 56 cents this week to close at $10.56/bu. The CBOT nearby contract gained 13 cents, closing at $8.19/bu, while KCBT was up nine cents, to $9.43/bu. Profit taking and a stronger dollar early in the week led to lower corn and soybean prices, which both fell by one cent from last Friday, to $7.58/bu and $13.79/bu, respectively.
  • The International Grains Council lowered their 2011/12 global wheat production forecast this week, from 672 MMT to 667 MMT. The reduced outlook was primarily due to adverse weather conditions in the EU and the US, where the forecasts were reduced by 3.0 MMT (141.1 MMT) and 1.5 MMT (56.0 MMT), respectively. IGC expects 2011/12 global wheat consumption to reach 669 MMT, down 3.0 MMT from last month’s projection, but still 8.0 MMT greater than 2010/11’s record level of 661 MMT.
  • Rain continues to hamper spring wheat planting progress. USDA reported spring wheat plantings at 54 percent complete for the week ending May 22, up from 36 percent the previous week, but still well below the five-year average of 89 percent. Progress in Canada has also been extremely slow; the Government of Saskatchewan reported spring planting at 54 percent complete, down from the average of 72 percent.
  • SRW and HRS FOB basis values for nearby delivery out of the Gulf were sharply higher this week due to limited grain movement and logistical problems caused by high water levels on the Mississippi River. SRW FOB basis for nearby delivery climbed by $0.20/bu, to $1.00/bu. HRS basis for 13.5% protein climbed to $3.90/bu, up from $2.75/bu a week ago. FOB HRS 13.5% basis for August delivery fell, however, from $2.70/bu to $2.45/bu.
  • The ICE Dollar Index was up sharply early in the week, reaching a two-month high, and pressured prices on Monday. The dollar weakened by week’s end, however, and the index stood at 74.93 on Friday, down from 75.43 a week ago.
  • Freight rates were higher this week because of tight vessel availability. The Baltic Panamax Index closed at 1,865, up from 1,666 last week. The Gulf/Japan and PNW/Japan routes both climbed by $2, to $54/mt and $31/mt, respectively.

File Name
PR 110527.pdf
PR 110527.xls
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