March wheat was up 4 1/4 cents late in the overnight session. Outside markets look mixed. While the USDA data for wheat does not show significant tightness in the US or even supply tightness on the world market, the tightening supply of higher quality wheat, poor US crop conditions, uncertain wheat conditions in China and general world food inflationary fears appear to be forces which have helped support the recent minor uptrend. Traditional buyers of Australian wheat like Indonesia are also showing more interest in US wheat, with European supplies tightening. The Philippines have suspended import duties on wheat to help limit the impact of rising world prices on their buyers. Jordan announced a tender for 100,000 tonnes of hard wheat overnight. Pakistan has resumed wheat exports for the first time in three years. Japan bought 119,480 tonnes of wheat at their weekly tender. Even with a massive January 1st supply of 21.5 million tonnes of wheat in India compared with a target of 8.2 million tonnes, India is considering banning wheat product exports. March wheat closed moderately higher on the session yesterday but down 20 cents from the early peak. Traders viewed the decline in US ending stocks, an adjustment higher in US exports and ideas that Australia may have a more difficult time in shipping wheat from flooded ports as positive news early, but disappointing world supply/demand news along with profit taking were seen as reasons for the setback from the highs. US ending stocks for the 2010/11 season came in at just 818 million bushels, down 40 million bushels from last month and down about 30 million from expectations. Ending stocks were 976 million last year. For the world report, however, ending stocks were pegged at 177.99 million tonnes, which was higher than expected and up from the 176.7 million tonnes estimated last month. Trade expectations had called for a drop of nearly 2 million tonnes. Argentina production was revised higher and Australia was left unchanged. Total winter wheat plantings for the 2011 crop were pegged at 40.99 million acres, in line with trade expectations and up 9.7% from last year. Hard red winter wheat plantings came in at 29.60 million acres vs. expectations near 30.2 million, and soft red winter plantings were 7.76 million acres compared with expectations near 7.2 million and only 5.27 million planted last year. Cold weather combined with the dry conditions in the southwestern plains was also considered a potential supportive force.
Join the Discussion