March wheat was up 1 cent late in the overnight session. Outside market forces look somewhat supportive today with a weak US dollar and a jump in energy and equity markets. There were no new deliveries against the December contract (564 to date). With a continued threat to the Ukraine winter wheat crop and talk that Russia wheat prices have at least stabilized, the market is finding better support from fund trader short-covering. Open interest has been very steady on the rally to the highest level since November 17th on Friday and a positive tilt to outside market forces this morning might help support the market. On top of reports of potential sharp losses to the Ukraine 2012 crop and even the potential for Ukraine to be a wheat importer next year, more rains in Australia may help tighten the supply of higher quality wheat. Saudi Arabia bought 330,000 tonnes of wheat at their weekend tender and traders see the wheat coming from various origins. Kazakhstan grain production this year is pegged near a record high 26 million tonnes as compared with 12.2 million tonnes last year. March wheat closed 11 1/4 cents higher on the session Friday and managed to rally 36 1/2 cents for the week. After some choppy trade early in the session, a continued positive tilt to outside markets and strength in other commodity markets helped spark another round of new buying and short-covering to drive the market higher. News from the Ukraine that the 2012 winter wheat crop might total just 8.5 million tonnes from 22.2 million this year helped to drive the market sharply higher. A shift in the US dollar trend from lower to higher and less euphoria in the stock market and other commodity markets helped spark the set-back from the highs. At one point, March KC wheat traded as much as 19 3/4 cents higher on the day. The winter storm over the weekend is expected to improve the moisture in the soil for the southern and central plains in the US. The Commitments of Traders reports as of November 29th showed Non-Commercial traders were net short 53,522 contracts, a decrease of 4,228 contracts for the week and the short-covering trend is seen as a short-term positive force. Non-Commercial and Nonreportable combined traders held a net short position of 77,914 contracts, down 5,050 for the week. Commodity Index traders held a net long position of 185,050 contracts, up 1,839.
Join the Discussion