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September 14, 2012


(See attached file: PR 120914.pdf) (See attached file: PR 120914.xls)

Highlights:
  • All three wheat futures markets closed higher this week, boosted by global supply concerns and a weaker U.S. dollar. Crop-damaging dry weather in Australia and lower USDA global production estimates bolstered speculation that world wheat supplies are tighter than previously thought. The U.S. Federal Reserve Bank’s announcement of additional economic stimulus spurred heavy commodity buying and weakened the U.S. dollar, making U.S. wheat more competitive in the world market and driving futures prices higher. MGEX September contract closed up 31 cents at $9.72/bu and KCBT September added 30 cents to close at $9.29/bu. CBOT September wheat gained 13 cents to $8.98/bu. CBOT September corn lost 18 cents on the week to close at $7.78/bu and CBOT September soybeans gained 5 cents to $17.37/bu.
  • HRS protein spreads have collapsed in recent weeks due to an abundant supply of high protein wheat available in the U.S. Increased demand for higher protein wheat supported KCBT and MGEX contracts this week.
  • USDA released its monthly WASDE update on Wednesday, pushing wheat prices lower early in the day but rallying to close the session higher. USDA upped the 2012/13 carry-in stocks by 1.0 MMT to 199 MMT but reduced the world production estimate by 4.1 MMT to 659 MMT. Estimated world demand declined 2.5 MMT to 681 MMT. USDA lowered estimated world trade and carryout stocks each by 500,000 MT to 135 MMT and 177 MMT, respectively. USDA left the balance sheet unchanged for most of the major wheat exporters. Estimated Russian production was lowered 4.0 MMT to 39.0 MMT but exports were left at 8.0 MMT. Ukraine’s export estimate decreased from 6.0 MMT to 4.0 MMT.
  • The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) cut its 2012/13 wheat production forecast from 24.1 MMT to 22.5 MMT on Monday, down from a record 29.5 MMT in 2011/12. Persistent dry weather has damaged the production outlook, particularly in western areas, adding to global supply concerns. Agricultural analysts at Australia & New Zealand Bank also lowered their production estimate by 3.0 MMT to 20.0 MMT. USDA left its Australian production estimate unchanged at 26.0 MMT on Wednesday.
  • The Baltic Panamax Index fell from 599 to 527 on Friday, reaching its lowest level since January of 2009. The index has fallen 66 percent in 2012. A wave of new shipping vessels and lower global demand is weighing heavily on the market. Maritime Research's Grain Freight Index declined from 501.0 to 499.8.
  • The ICE US Dollar Index fell 2 percent this week from 80.23 to 78.84 on Friday.

File Name
PR 120914.pdf
PR 120914.xls
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