March wheat was down 15 1/4 cents late in the overnight session. Outside markets appeared slightly positive with a weak US dollar. Talk of better rain chances in China and a continued long liquidation selling trend helped to pressure the market overnight, with March futures moving to their lowest level since December 1st. The Chinese ministry of Agriculture indicated that the coming precipitation will be very favorable to wheat growth and will help relieve drought conditions. European wheat was down as much as 7% overnight before recovering much of the losses. On top of the massive long liquidation selling trend seen yesterday for most grain markets, talk of rain for the coming weekend in China and ideas that violence from Libya could spread across the region helped drive the market down the limit yesterday. Volume was high in the early going. Speculative long liquidation selling has emerged as the major theme for grain markets. With the losses overnight, March wheat has fallen as much as $1.70 1/4 off of the February 9th highs. Ideas that political tensions in the Middle East and North Africa could slow the global economy and slow movement of grains into the region helped spark some of the long liquidation selling. Iraq is tendering for 100,000 tonnes of wheat, and United Arab Emirates is tendering to buy 40,000 tonnes. Morocco will tender to buy 280,000 tonnes of wheat to be used for subsidized flour. Egypt also bought 120,000 tonnes of US soft red winter wheat yesterday. Weekly export inspections, released during the session yesterday, came in at 31.009 million bushels, which was higher than expected, but the focus of attention appears to be on risk-adverse trade. The weekly crop conditions report from Texas showed the wheat crop rated 0% excellent, 13% good, 27% fair, 32% poor and 28% very poor. The large percentage of crop in the low categories suggests some replantings to other crops might be an issue.
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