December wheat was up 4 1/2 cents late in the overnight session. Outside market forces look more positive today with a break in the US dollar and strength in metal and equity markets providing some support. The combined large and small trader net short position as of November 8th already reached 58,928 contracts so the break this week has traders looking at an extreme oversold condition for wheat. Black Sea region countries plan to export 35.7 million tonnes of wheat this year from 14.1 million last year and this has caused the export pace from other countries, including the US, to suffer. The higher US dollar and the emergence of a large southern hemisphere crop just added to the negative tone this week to help drive the market lower. Taiwan bought 35,100 tonnes of US wheat in their tender overnight. US wheat sales are running 23% behind last year. December wheat closed sharply lower on the session yesterday and down to the lowest level since June of 2010. A negative tilt to other commodity markets plus lower than expected weekly export data plus continued selling from fund traders helped to push the market sharply lower. December KC wheat also pushed to a new 16 month low. Weekly export sales for wheat came in at 317,100 metric tonnes for the current marketing year and 17,500 for the next marketing year for a total of 334,600 which was below trade expectations. As of November 10th, cumulative wheat sales stand at 63.3% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 65.6%. Sales of 334,000 metric tonnes are needed each week to reach the USDA forecast. The EU granted export licenses for 241,000 tonnes of wheat this week which pushed cumulative sales to 5.8 million tonnes as compared with 9.2 million last year. On top of poor export news, traders are talking about the outlook for more rain for parts of the southern plains next week which could benefit the crop going into dormancy. Argentina Agricultural ministry pegged wheat production for the 2011/12 season at 12 million tonnes from 12.6 million last month. In the world supply/demand report, the USDA just lowered production to 13 million from 13.5 million as the October estimate. Ag Canada left their production estimate unchanged from last month at 24.2 million tonnes from 23.2 million last year.
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