December wheat was up 1 1/2 cents late in the overnight session. Outside market forces look mixed as a firm US dollar is offset by higher trade in gold and energy markets. Weekend news from grain officials in the Ukraine that the country may lose near 30% of the winter grain crop for 2012 due to drought conditions for the planting season, with some areas seeing a 50% loss, helped to provide support overnight. Ukraine's grain harvest reached 51.9 million tonnes as of November 4th according to the Agriculture minister. Ukraine is expected to harvest near 54 million tonnes this year, compared with 39.2 million last year. While some of the 2012 crops can be replanted, the dry weather has already caused significant damage. Kazakhstan's grain production this year is expected to reach a record high 29.7 million tonnes as compared with 13.9 million last year. The Commitments of Traders reports as of November 1st showed non-commercial traders were net short 48,576 contracts, an increase of 5,399 for the week. Non-commercial and nonreportable traders combined held a net short position of 70,151 contracts, up 5,776. Commodity index traders held a net long position of 189,173 contracts, down 12. The selling trend of the large trader is a bearish near term force. Trend-following fund traders increased their net short position to a whopping 74,365 contracts, which was up 5,910 for the week and close to the record of 77,446 contracts from June 15th of 2010. December wheat closed 3/4 of a cent higher on the session Friday but down 7 3/4 cents for the week. Strength in the US dollar and weakness in equity markets was enough to push the market lower early. Talk of a near record crop on the way from Australia and rain in the forecast for parts of the southern plains in the US helped to pressure. Traders see the supply/demand report for Wednesday morning showing ending stocks down about 20 million bushels from last month. Last month's estimate was 837 million bushels as compared with 862 million last year and 976 two years ago. The USDA attache in Australia pegged the production this season at 26 million tonnes, which is coming close to the all-time high of 26.3 million last year.
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