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June 11, 2010

(See attached file: PR 100611.pdf)(See attached file: PR 100611.xls)

Highlights:
  • Delays in Canadian plantings supported wheat prices this week, with futures posting their first weekly gains in three weeks. Short covering also contributed to the rally in the markets on Friday. After reaching their lowest level in nine months on Thursday, CBOT nearbys closed up 5 cents on the week at $4.40/bu, while KCBT nearbys were up 2 cents from last week, at $4.67/bu. With Canadian planting delays primarily threatening the spring wheat crop, MGEX posted the largest gains on the week, gaining 9 cents to close at $5.01/bu. USDA reduced their U.S. corn ending stocks estimate, primarily due to increased ethanol use, which supported CBOT corn nearbys. CBOT corn prices gained 9 cents from last week, closing at $3.49/bu. Soybean prices were also up, surging on Wednesday following fresh sales to China. CBOT soy nearbys closed 11 cents higher than last week, at $9.46/bu.
  • USDA’s June World Agricultural Supply and Demand Estimates (WASDE) placed 2010/11 global wheat production at 669 MMT, a decrease of 3.0 MMT from last month’s report. The decrease was primarily due to a reduced EU production estimate because of adverse weather conditions. USDA also reduced their 2010/11 global ending stocks estimate, by 4.0 MMT from last month, to 194 MMT.
  • USDA also released their June Crop Production report this week, pegging the 2010/11 U.S. winter wheat crop at 1,482 million bushels (40.3 MMT), a two percent increase from last month. The largest increase came in HRW production, which was raised by 19 million bushels because of a higher yield estimate to 979 million bushels (26.6 MMT).
  • Rains continue to delay plantings across Canada. Saskatchewan Agriculture reported 70 percent of the 2010 spring crop was planted as of June 7, compared to the five-year average of 96 percent. The crop report noted that very little planting progress has been made in the past three weeks.
  • Gulf HRW basis continued to plummet with the advancing harvest and anticipation of another large crop. Gulf HRW 11.0 basis fell to -.25 cents per bushel and FOB values to approximately $160/mt, its lowest price since September 2005.
  • Freight rates continued to slide this week as Chinese import demand has been slowing down. The Baltic Panamax Index fell for the third straight week, falling to 3,361, which is a 13 percent decline from last week. Destination rates were down as well, with Gulf/Japan at $68/mt and PNW/Japan at $37/mt.

File Name
PR 100611.pdf
PR 100611.xls
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