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Wheat Morning Update & Commentary: 3/11/2010

Yesterday's USDA report confirmed the world was still awash in wheat. Chicago, Kansas City and
MPLS contract all traded into fresh 6 month lows. Export Sales this morning were somewhat surprising,
arriving at 407,900 tons - near the high range of estimates. Corn and Soybeans sales, however, were
dismal, which could apply some pressure. Black Sea wheat continues to be the leader on price as the
Egyptians bought 120,000 tons of French and Russian Wheat. Export markets remain crowded with
stiff competition coming from all regions. U.S. prices must get more competitive, as freight
disadvantages continue to leave U.S. exporters with their hands full. A total of 152,000 mt of US,
Canadian & Aussie Wheat were bought on Thursday by Japan under regular tender rules. Noble sold
25,000 mt of soft mill Wheat to Tunisia for shipment between May 10-20 in an impromptu tender for a
reported price of $190.95/mt. Bangladesh is still around the market and Japan has an outstanding SBS
tender. 2010 All Wheat Canadian acreage, according to a private poll by Canadagrain.com, expects 24
mln acres planted a decline of 3.4% from the prior crop year.
Overnight trade had a somewhat tight trading range as the market is into fresh contract lows. Chicago
wheat closed down 1 3/4 cents in the May with 2927 contracts changing hands. In Kansas City, wheat
finished down 1 1/2 cents and in MPLS wheat finished down 1 3/4 cents. Kansas City is now 9 3/4 cents
premium to Chicago and MPLS is 23 1/4 cents premium Chicago in the July. Matif wheat is trading
higher as French participation helps to stabilize that market.
Globex Overnight
Contract Last Net Change High Low Volume
ZWH10 470^6 0
ZWK10 479^6 -1^6 483^2 479^2 2927
ZWN10 492^4 -2^0 496^0 492^2 2084
ZWU10 509^4 -1^4 511^2 509^4 238
KEH10 484^0 0
KEN10 500^2 -1^4 502^2 500^0 76
MWEH10 499^4 0
MWEN10 515^6 -1^6 518^2 515^6 3
Early Opening Calls: off 1-2 cents
Top News
**USDA Wheat 09/10 Export Sales Net: 407,900 mt; 10/11 Net: 40,500 mt; expected 250k-500k mt
-- Total of 152,000 mt of US, Canadian & Aussie Wheat were bought on Thursday by Japan's Ag
Ministry under regular tender rules
-- 2010 All Wheat Canadian acreage, acc. to private poll by Canadagrain.com, expects 24 mln acreas
planted, a decline of 3.4% from the prior crop year. Durum Wheat acreage is expected at 4.3 mln acres,
down 24%, but spring Wheat planted is expected to rise +6.9%. The shift from Wheat acreage is
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expected to expand Canola planting by Candian farmers to 17.7 mln acres a rise of 9% from the
previous crop.
-- Noble sold 25,000 mt of soft mill Wheat to Tunisia for shipment between May 10-20 in an impromtu
tender for a reported price of $190.95/mt, acc. to traders
-- UK farms ministry sees 2010 Wheat harvest area up 11.5%, while 2010 rapeseed harvest area is seen
9.8% higher than the prior season
-- China's gov't reported Consumer Prices during February grew at a 2.7% annualized pace, up from
January's 1.5% pace. The country's top central banker says inspite of the jump Feb's pace remains
within the 3% target set by the bank
-- Pending Tender: 152,000 mt of US, Aussie, Canadian Wheat sought in a regular tender by Japan's Ag
Ministry on Thursday this week. Delivery of the grain is between Apr 21 and May 20
-- Pending Tender: March 9th is deadline for UN food agency tender for 56,000 mt of Wheat for
donation to Ethiopia. This 56,000 mt volume is in addition to another 64,000 mt purchase also destined
for Ethiopia
-- Pending Tender: Mar 19th is date set for Japanese SBS tender, they'e seeking 25,000 mt of food grade
Wheat, acc. to ag ministry official
-- Pending Tender: A 70,000 mt optional origin Wheat tender was again refloated by Bangladesh on
Thursday, Acc. to state official. The bid deadline for this tender is set for March 25th
-- Liffe May milling wheat futures were off -0.50 euro at 122.0 euros/mt.
-- Globex Wheat Vol. 73,163; Pit Vol. 6,057; Open Interest Change: + 3,416
-- Weather: 6 - 10 Day Forecast: Normal to Above Temps. Below Normal Precip.
-- Outside markets: Energy Complex -0.66 at $81.43; Gold & Silver: -6.4 at $1101.7 & -0.113 at
$16.905; US $ +0.035 at $80.500
Cash Markets
-- CIF SR Wheat steady off 5: Mar. +35 to +50 Apr. +35 to +50 July +28 to +35
--
John Christopher
Linn Group
312.896.2061