March wheat was up 14 3/4 cents late in the overnight session. Outside markets look supportive led by a weaker US dollar. News that Algeria has bought about 1 million tonnes in the past two weeks to stock up just in case unrest continues has helped provide underlying support to the wheat market. Algeria bought 600,000 tonnes, and Libya bought close to 100,000 tonnes in their tender for 85,000. Inflation issues are causing some unrest in many countries, and this could spark increased interest in US wheat over the near term. Egypt indicates that stocks are adequate for now, and Saudi Arabia plans to double their wheat reserves and boost storage in the next few years. On Friday the market saw an impressive recovery off of the midday lows, finding support from a strong rally in corn and a recovery in the US equity and energy markets. While March futures closed 10 cents off of their lows of the day, they still ended up around 10 cents lower on the day and near unchanged on the week. July wheat closed lower on the session but up on the week. Ideas that there was some winterkill damage from the cold weather last week helped to support the new crop contracts. The early sell-off drove the market more than 20 cents lower on the day. The plains show no signs of damaging cold weather in the next week, but conditions remain poor due to lack of moisture. As of January 1st, the Kansas crop was rated 27% in good to excellent condition as compared with 69% last year and 59% as the 5-year average. While winter wheat crop conditions in the US and China are poor and China's dryness is of particular concern, traders believe that weather in February and early March will be the key factor to see any impact of dryness through the winter. Traders see warming weather in the plains and snow cover in the Midwest as short-term negative forces for prices. The Commitments of Traders reports as of January 11th showed non-commercial traders were net long 26,379 contracts, a decrease of 531 contracts for the week. Non-commercial and nonreportable traders combined held a net long position of 9,145 contracts which was down 1,299 contracts for the week. The selling trend is seen as a short term negative force. Commodity index traders held a net long position of 205,205 contracts, down 8,862 contracts for the week.
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