March wheat was up 2 1/4 cents late in the overnight session. Outside markets look somewhat supportive with a lower US dollar. Ideas that the European supply of available surplus wheat for export is tightening just as world buyers show more urgency to book future needs has helped support the market in recent days. Traders will monitor demand for US wheat closely over the near-term. The European Union granted export licenses for 171,000 tonnes of soft wheat this week, which pushed the cumulative total for the marketing year to 12.05 million tonnes, compared with 9.6 million tonnes last year by this date. While world supply is still looking somewhat abundant, higher quality wheat remains in tighter supply due to Australia's floods and Russia's drought. Traders remain concerned about the extremely dry conditions for the dormant winter wheat crops in the US and China, as problems in one of these key producers could quickly shift the balance. India's plantings reached 29.1 million hectares vs. 28.1 million last year, and there do not seem to be any serious weather issues there. The market pushed from sharply lower on the session to close higher on the day yesterday with active buying late helping to boost the market higher. A late surge in corn and ideas that the US export pace will pick up steam over the near term lent support. Ideas that the recent rally left the market in an overbought condition plus weakness across a wide spectrum of commodity markets helped to pressure the wheat market early. A more urgent tone for cash market tenders along with inflationary fears helped provide some underlying support. Jordan bought 150,000 tonnes of US hard wheat for March/April shipment. Algeria bought 600,000 tonnes of durum wheat mostly from Canada. Iraq and Tunisia are still working tenders. Taiwan is considering lowering tariffs on imports as a way of dealing with food inflation. The International Grain Council raised their world wheat production estimate for 2010/11 to 647 million tonnes, up 3 million from the previous forecast. They also indicated that average yields would suggest a world crop of 670 million tonnes for 2011/12. Traders expect weekly export sales, for release before the opening, to come in near 750,000 tonnes.
Join the Discussion