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Market Commentary

Closing Comment 05/16


Wheat futures closed higher on Wednesday. Wheat futures soared despite resistance from outside market factors. Calls for warm, dry weather across the US Plains continued to push prices upward as traders are concerned the winter wheat crop would be damaged. The CBOT contracts were up 5 percent, posting their largest gains in six weeks. CBOT July is 30 1/4 cents higher at $6.38 3/4; KCBT July is 28 1/2 cents higher at $6.56; and MGE July is 9 1/2 cents higher at $7.60.
Market Info

World wheat production projected higher

USDA  |   January 17, 2012

World wheat production in 2011/2012 is projected up 2.5 million tons this month to 691.5 million, up 1 percent from the previous record in 2009/2010. The main contributor to the latest increase is Kazakhstan, where wheat production is projected 1.5 million tons higher this month at 22.5 million, exceeding the country’s previous production record in 1979, when area sown for wheat was 20 percent higher.

USDA started to break out individual countries of the Former Soviet Union in its database beginning in 1987. Kazakh 1979 data are from a Soviet-era statistical source. The Kazakh statistical agency has just finalized the wheat harvest numbers, incorporating losses from cleaning and drying of harvested grain (cleanweight vs. bunker weight), and took stock of historically high wheat yields that for the most part were generated by exceptional weather conditions throughout the growing season.

Another upward FSU revision is for Russia, up 0.2 million tons to 56.2 million, as the country’s statistical agency (RosStat) has just published the preliminary crop production data.

Wheat production is also up 0.8-million tons in Brazil, where the wheat crop has already been harvested, and the latest indicators from the government statistical agency show a production estimate of 5.8 million tons.


 

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