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January 18, 2013


(See attached file: PR 130118.pdf) (See attached file: PR 130118.xls)

Highlights:
  • All three nearby wheat futures contracts closed higher this week, posting the largest one week rally since July. Markets continued to react to last week’s USDA reports which estimated lower world production and lower than expected U.S. planting projections. Unfavorable weather forecasts and increasing concern of tight world supplies drove markets higher. The CBOT March wheat contract increased 5 percent (37 cents) to $7.91/bu. KCBT added 4 percent (30 cents) to $8.37 and MGEX closed at $8.69/bu, a 3 percent (24 cent) gain. CBOT March corn added 16 cents to close at $7.24/bu and CBOT March soybeans closed at $14.29/bu, a 56 cent gain.
  • Freezing temperatures and lack of precipitation in the drought stricken U.S. plains furthered concerns of poor crop development. A cold front is expected to move into the U.S. Midwest in the next few days with little to no chance of precipitation.
  • Argentina’s agricultural ministry cut its 2012/13 production estimate from 10.5 MMT to 10.1 MMT this week. Extreme weather conditions ranging from excessive rain and heat, hail and strong winds caused lower yields. The move added to concerns about tightening world wheat supplies.
  • IGC increased its forecast for 2012/13 world wheat production by 2.0 MMT to 656 MMT, 6 percent lower than 2011/12 production of 696 MMT. IGC cited bigger-than-expected harvests in Australia, Canada, China and the EU. USDA’s current world production estimate is 654 MMT.
  • USDA reported export wheat sales of 536,200 MT this week, more than double the previous week and within trade estimates. Total known sales for the 2012/13 marketing year are 19.9 MMT, 3 percent below last year’s sales to date of 20.5 MMT.
  • The Baltic Panamax Index closed at 740 on Friday, down from 772 last week. Freight activity returned to more normal levels this week after backed up demand due to the holidays caused a spike in the index and freight rates. Maritime Research's Grain Freight Index increased this week from 494.0 to 496.2.
  • The US Dollar Index decreased slightly this week from 80.61 to 80.12.

File Name
PR 130118.pdf
PR 130118.xls
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