March wheat was down 4 cents late in the overnight session. Outside market forces look mixed to mostly negative today with a firming trend to the US dollar overnight and weakness in metals. There were 440 new deliveries against the December contract to push the month-to-date total to 1,444 contracts. If the outside markets remain less volatile, the short-term positioning ahead of the USDA supply/demand update for Friday could be the focus of attention over the near-term. The market has seen a strong recovery off of the lows due to fears of tightening supply next year after a very poor start to the winter wheat crop outlook for Ukraine and questionable conditions for the US crop. Ideas that Russia exportable surplus will dwindle and that global prices may have bottomed has been a theme for the bulls this week but South America and Australia wheat may now take over to undercut US exporters. The tighter world supply of higher quality wheat on the world market has supported firm spring wheat exports from the US and some traders see a revision higher in US exports for the report Friday which would pull down US ending stocks slightly. Most traders are looking for little change in the US numbers. World supply, however, may be adjusted higher by about 2-4 million tonnes if Australia and Canadian wheat production is revised higher. After trading lower on the session early in the day, March wheat managed to trade higher on the day late in the session yesterday as the market seemed to quickly absorb a higher than expected Canadian wheat production revision. When fund selling dried up, the market was in a position to bounce. Concerns about the potential downgrade of European countries soon plus news of a record high crop in Australia helped to pressure the market early but the selling slowed and the market bounced off of the lows. Egypt bought 240,000 tonnes of wheat from Argentina (180,000) and Russia (60,000). Traders indicated that prices sold to Egypt have been mostly steady over the past few months and there was some hope that Russia exportable surplus wheat supply could tighten soon. With a 31 1/2 cent break off of Monday's highs, talk of the oversold condition of the market helped slow the selling pressure as well. Stats Canada pegged production at 25.26 million tonnes which was up 9% from last year and more than 1 million tonnes up from trade expectations. Syria bought 100,000 tonnes of Black Sea wheat overnight.
Join the Discussion