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January 22, 2010

(See attached file: PR 100122.pdf)(See attached file: PR 100122.xls)

Highlights:
  • Wheat futures traded lower again this week due to continued pressure from global supplies and a strengthening dollar. President Obama’s plan to limit the ability of banks to invest in commodity markets also weighed down prices. The CBOT March contract has fallen 70 cents in the past two weeks, dropping 11 cents this week to close at $4.98/bu. KCBT nearby prices were down 10 cents, to $5.02/bu, and MGEX nearbys fell 8 cents, to $5.12/bu. Soybean prices continued falling due to large South American production estimates and concerns over slowing Chinese demand. CBOT soy nearbys lost 22 cents on the week, closing at $9.51/bu. Corn prices fell 6 cents, to $3.64/bu.
  • The International Grains Council (IGC) released their latest world wheat production estimate, projecting 2009/10 output to reach 674 MMT. The projection, which is 6 MMT greater than their previous estimate, is primarily due to increased yields in Russia and Canada. IGC’s global production forecast for 2010/11 currently stands at 653 MMT, which would be the third largest crop on record.
  • The Obama Administration unveiled a new proposal to limit financial risk taking by some of Wall Street’s largest banks. The proposal would prohibit financial institutions that own banks from sponsoring, owning, or investing in hedge funds or private equity funds. The announcement of the proposal pressured futures prices given that the proposed restrictions could limit the flow of funds into commodity markets.
  • Commercial sales received a boost following the substantial price drop last week. Sales for the week ending January 14, 2010 reached a marketing-year high at 825,800 metric tons. Increases were reported for the Philippines (90,000 HRS, 97,600 white), unknown destinations (58,950 HRW, 51,140 HRS, 16,750 white, -13,500 durum), Nigeria (100,000 HRW, 7,072 SRW), Japan (23,183 HRW, 42,025 HRS, 12,140 white), Morocco (75,000 HRW), Thailand (8,000 HRW, 14,000 HRS, 25,100 white), and Venezuela (10,500 HRW, 18,500 HRS, 8,000 SRW, 10,000 durum).
  • The Baltic Panamax Index (BPI) fell again this week as Chinese iron ore imports continue to slow. The BPI closed at 3,661 this week, down 84 points from a week ago. Destination routes were also down, with Gulf/Japan at $68/mt and PNW/Japan at $39/mt.
  • The dollar ICE index climbed sharply higher during the week. The index climbed from a one-month low (76.73) last week to its highest point since last September. The index stood at 78.31 on Friday.


File Name
PR 100122.pdf
PR 100122.xls
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