May wheat was up 9 3/4 cents late in the overnight session and moved to the highest level since February 22nd. Outside market forces have a positive tilt. Deliveries against the March contract came in at 426 contracts. The market continues to be well supported by active demand for wheat from the Middle East and North Africa countries, concerns for poor crop conditions in the US and ideas that wheat is undervalued compared with corn. May wheat closed moderately higher on the session yesterday and experienced the highest close since February 18th. A continued dry forecast for western and southern growing areas of the US plains along with expectations for solid new demand for US wheat ahead helped support solid gains. Traders see dry weather for the region for the next 10 days and some chance of rain in the extended forecast models. The dry forecast overshadowed disappointing weekly export sales which came in at just 560,600 metric tonnes for the current marketing year and 90,300 for the next marketing year for a total of 650,900. Cumulative wheat sales stand at 88.2% of the USDA forecast for 2010/2011 (current) marketing year versus a 5 year average of 86.7%. Sales of 301,000 metric tonnes are needed each week to reach the USDA forecast. The EU granted export licenses for 244,000 tonnes of wheat for the week which pushed cumulative sales for the season to 13.8 million tonnes from 11.9 million last year at this time. India officials see a record high wheat harvest for the 2010/11 season with the harvest set to begin near the end of the month. An Argentina port strike may also slow wheat exports which helped provide some underlying support as well. China officials overnight spoke of another bumper wheat harvest this year despite a winter drought. Officials believe that the emergency response to increase irrigation plus recent rain and snow may have helped turn the crop around. The forecast for China winter wheat areas is mostly dry for the next week but cool weather may keep the crops dormant. Talk that Russia may extend the export ban through the end of the year was seen as a positive development yesterday.
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