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May 4, 2012


(See attached file: PR 120504.pdf) (See attached file: PR 120504.xls)

Highlights:
  • Wheat futures closed lower this week due to expectations of large 2012/13 U.S. crops. Crop boosting weather, ideal growing conditions and high estimated yields from an annual U.S. crop tour added to the concern. A stronger dollar also pressured prices, particularly on Wednesday and Friday. CBOT took the largest loss with 39 cents to close at $6.04/bu. MGEX closed down 34 cents at $7.40/bu and KCBT closed at $6.14/bu, a 33 cent loss. CBOT corn gained 9 cents on the week to close at $6.62/bu and CBOT soybeans lost 22 cents on the week to close at $14.75/bu. It was the first weekly loss for soybeans since March 23.
  • CBOT corn increased its premium over the CBOT SRW and KCBT HRW contracts this week. On Friday, CBOT corn held a 48 cent premium to KCBT HRW, up from 6 cents last week, and a 58 cent premium to CBOT SRW, up from 11 cents last week.
  • The annual HRW wheat quality tour took place this week in Kansas. Participants surveyed crops and estimated production potential throughout Kansas and in parts of Nebraska and Oklahoma. During the two-and-a-half day tour more than 500 fields were tested. Final tour estimates resulted in a prediction of total Kansas production of 404 million bushels (11.0 MMT) with an average yield of 49.1 bushels per acre (bpa). The yield estimate is higher last year’s tour prediction of 37.4 bpa and the highest in 13 years. Reports of high yields pressured prices mid-week.
  • In its weekly crop conditions report on Monday, USDA rated the U.S. winter wheat crop at 64 percent good to excellent, up from 63 percent last week and up from 34 percent last year at this time. The percentage rated poor to very poor remained unchanged at 10 percent, compared with 40 percent last year. USDA showed spring wheat planting as 74 percent complete, compared with the 5-year average of 32 percent. It pegged crop emergence at 30 percent, up from 18 percent last week and just 8 percent this week last year. The positive crop conditions continue to weigh on wheat markets.
  • Private analytical firm Informa Economics lowered its 2012/13 U.S. winter wheat production estimate to 679 MMT from its previous estimate of 680 MMT and down from 2011/12 production of 696 MMT.
  • The Baltic Panamax index closed lower this week at 1,527, down from 1,738 last week, halting a strong two-week rally in which the index gained 57 percent. Analysts believe the market was self-correcting this week after an overly optimistic two weeks. There remains an oversupply of vessels in the market.
  • The ICE Dollar Index closed higher this week at 79.59, up from 78.76 last Friday. The stronger dollar hurt wheat markets on Wednesday and Friday.

File Name
PR 120504.pdf
PR 120504.xls
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