Price Report - June 15, 2012
PR 120615.pdf PR 120615.xls
- Nearby wheat futures contracts closed mixed this week as tight supplies of high protein wheat helped the MGEX July contract buck the otherwise downward trend. A cut in Australia’s production forecast and a rare sale of SRW to China provided support for markets Wednesday and Thursday, but not enough for CBOT and KCBT to overcome other bearish factors. A bigger-than-expected USDA forecast for U.S. winter wheat production, seasonal harvest pressure and global economic uncertainty ahead of political elections in Greece pressured markets this week. The MGEX July contract gained 21 cents on the week to close at $7.87/bu but all deferred month contracts lost 17 cents or more. CBOT closed 21 cents lower at $6.10/bu and KCBT closed at $6.30/bu, a 26 cent loss. CBOT nearby corn lost 19 cents to $5.80/bu and CBOT soybeans closed at $13/76/bu, down 50 cents on the week.
- In its monthly WASDE report released on Tuesday, USDA lowered its 2012/13 world wheat supply estimate from May by 6.9 MMT to 868 MMT. USDA reduced estimated world carry in stocks by 1.5 MMT to 196 MMT and reduced its world production estimate by 5.5 MMT to 672 MMT. USDA expects world demand to reach 682 MMT, a 4.6 MMT reduction from May, including 132 MMT in feed use. USDA reduced estimated U.S. carry in stocks by 1.0 MMT to 20.0 MMT and lowered the U.S. production forecast slightly to 60.8 MMT.
- In its weekly crop progress report, USDA increased the percentage of HRW rated good or excellent to 53 percent, compared to 52 percent last week and 35 percent last year at this time. USDA downgraded the HRS condition from 78 percent rated good or excellent last week to 75 percent this week.
- Higher than expected U.S. commercial sales gave wheat futures a boost on Thursday. Net sales of 432,900 MT exceeded trade estimates of 250,000 to 350,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for the 2012/13 marketing year, through June 7, 2012 were 5.55 million metric tons (MMT).
- Australia’s official commodities bureau ABARES unexpectedly cut its domestic wheat production forecast on Wednesday, providing support to U.S. futures markets. ABARES downgraded its estimate for Australia's 2012/13 crop to 24.1 MMT, which would represent an 18.3% drop from last year's record harvest and the smallest crop in three years. USDA’s WASDE report this week pegged Australian production at 26.0 MMT.
- On Thursday, French analyst Strategie Grains raised its forecast for 2012/13 EU soft wheat harvest to 124 MMT following favorable growing weather in the past month. If realized, the increased forecast for soft wheat, the main crop in the 27-member EU, would be down 4 percent from estimated 2011 output of 129 MMT. The analyst raised projected 2012/13 EU wheat exports by 2.0 MMT to 13.5 MMT on improved price competitiveness.
- Two EU countries released updated supply and demand estimates this week. French farm office FranceAgriMer released its preliminary 2012/13 outlook on Thursday, in which it estimated French production to increase from 2011/12. The grains committee pegged production at 34.4 MMT, up from 33.9 MMT in 2011/12. Weather damage led the German Farm Cooperatives Association to lower its production forecast to 21.3 MMT, down from an estimated 22.0 MMT in May and 22.7 MMT in 2011/12.
- The Baltic Panamax index increased for the second week in a row, closing at 1,065, up from 914 last week. Increased activity of panamax vessels, particularly for coal shipments, supported the index. Maritime Research’s Grain Freight Index declined for the six straight week to, 422.9, down from 423.8 last week.
- The ICE Dollar Index closed lower this week at 81.61, down from 82.56 last Friday.