Price Report - October 12, 2012
PR 121012.pdf PR 121012.xls
- Wheat markets closed mixed this week despite four days of solid gains. Anticipation of cuts to production estimates in Australia and Russia ahead of USDA’s monthly WASDE report resulted in modest gains early in the week. Markets received another push upon the report’s release, which confirmed analysts’ predictions of tighter global wheat supply. However, a weak commercial sales report on Friday sent all three wheat contracts lower. MGEX and KCBT’s loss was limited because of a shortage in high protein wheat globally. KCBT December contract gained 12 cents on the week to close at $8.90/bu and MGEX December closed 5 cents higher at $9.24/bu. CBOT December wheat posted the largest loss of the three nearby contracts on Friday, closing 1 cent lower than last Friday at $8.57/bu. CBOT December corn gained 3 cents to $7.51/bu and CBOT January soybeans lost 29 cents to close at $15.22/bu.
- USDA released its monthly WASDE update on Thursday. It lowered estimated 2012/13 wheat production by 5.7 MMT to 653 MMT, including a 3.0 MMT decrease in Australian production (23.0 MMT) and 1.0 MMT decrease in Russian production (38.0 MMT). USDA lowered projected world consumption by 2.4 MMT to 687 MMT, despite a 2.4 MMT rise (134 MMT) in feed use. USDA increased estimated U.S. feed wheat use by 2.58 MMT to 8.57 MMT, pushing total U.S. consumption to its highest point since 1998/99 at 36.4 MMT.
- USDA’s weekly export sales report, which was delayed one day because of a Monday holiday, showed lower than expected wheat sales and pushed futures markets lower. According to the report, net weekly sales of 279,900 MT were down 9 percent from the previous week, 30 percent from the prior 4-week average and below trade estimates of 350,000 to 550,000 MT. Total known outstanding sales and accumulated exports for the 2012/13 marketing year, through October 4, 2012, were 13.4 MMT, 12 percent lower than last year's year-to-date total of 15.2 MMT. USDA forecasts 2011/12 U.S. wheat exports (including donations) to reach 31.3 MMT.
- French farm office FranceAgriMer cut its 2012/13 ending stocks forecast to 1.8 MMT, the lowest level in 13 years. The cut was largely a result of higher projected exports of 9.5 MMT, up from last month's forecast of 9.0 million.
- The Baltic Panamax Index increased 46 percent this week to 871, up from 598 last Friday. Increased demand to transport coal and grains supported the index this week. Maritime Research’s Grain Freight Index saw a more modest gain from 507.1 to 507.8.
- The ICE US Dollar Index closed higher this week at 79.74, up from 79.43 last Friday. A stronger dollar limited gains in wheat futures early in the week.