March wheat down 4 1/2 cents late in the overnight session. A weaker US dollar helped provide some outside market support. The new contract high and lower close for wheat yesterday leaves the market vulnerable to some long liquidation selling pressures from technical oriented traders over the short-term. The market has seen a rally of more than $1.00 per bushel off of the January 11th lows, as political unrest tied to food inflation in North Africa and the Middle East has sparked active new tenders and active purchasing from end users. After closing higher for seven sessions in a row and posting new highs, March wheat closed moderately lower on the session yesterday and near the lows of the day. Talk of a little more rain in the US forecast, talk of the overbought condition of the market and a lack of news in the cash or export tender market to spark more buying were seen as negative forces. A little less concern over the dormant crops in the US and China helped to spark the long liquidation sell-off early. Ideas that the market is overbought plus a significant recovery bounce in the US dollar also helped to pressure the market, and weakness in gold and energy markets may have added to the long liquidation selling trend. Weekly export sales for wheat came in at 894,100 metric tonnes for the current marketing year and 153,600 for the next marketing year for a total of 1.047 million. Old crop sales of only 385,000 metric tonnes are needed each week to reach the current USDA forecast. Traders see a forecast for rain in Oklahoma and Texas into next week as helping to ease dryness concerns, and China wheat officials do not see their drought conditions as abnormal for this time of the year and not as bad as recent winters. The EU granted export licenses for 240,000 tonnes of soft wheat this week which pushed the total for the marketing year so far to 12.3 million tonnes compared with 9.95 million tonnes last year at this time.
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