March wheat was up 1/2 cent late in the overnight session. Outside markets were looking slightly supportive. The market saw a recovery bounce overnight with March wheat trading as much as 9 cents higher in an attempt to recover some of yesterday's sharp losses. Ideas that demand will be strong on the setback in prices and continued talk of dry weather in China helped to support the bounce. The market did fall back to near unchanged late in the overnight session. With hefty beginning stocks for the 2011/12 season, traders do not see cash market tightness now. The focus is on any potential weather disruptions to the crop this season. Pakistan's exports have reached 1 million tonnes since the start of the year and are expected to reach close to 3 million tonnes this year. Argentine officials authorized another 1 million tonnes of exports. Egypt announced another tender to buy wheat, and this may have helped support the bounce overnight as well. The wheat market sold off sharply yesterday on an improving weather outlook, general weakness across the grain markets and long liquidation. March wheat fell to its lowest level since January 31st, with trade talk that higher wheat prices could slow demand. There were also ideas that the recent snows in China may have improved the drought conditions there. The outlook for the next week, however, is still dry. Also, rain is showing up in the longer-term forecast models for the US winter wheat belt, which would help recharge the soils there. But traders see only slight rain amounts for the southern and western parts of the belt. US export business appears to have slowed somewhat after the recent flurry of sales to North Africa and the Middle East. Gulf basis levels slipped yesterday but were firm after the Egypt tender was announced after the close.
Join the Discussion