March wheat was up 3 1/4 cents late in the overnight session. Outside market forces look supportive today with a weaker US dollar and strength in equity, energy and metal markets. Burdensome global supply, especially from key exporters, has helped to keep trade psychology negative, and outside market forces have just added to the negative tone. March wheat closed lower on the session yesterday and pushed to new contract lows after trading higher on the day for much of the session. The market found support early with a weak US dollar and higher soybean prices helping to support. The upside was limited by a continued weak demand tone, especially for US wheat. Net weekly export sales for wheat, in the report released before the open yesterday, came in at just 318,400 metric tonnes, which was near the low end of expectations. Japan and Mexico were the best buyers. As of December 8th, cumulative wheat sales stand at 74.2% of the USDA forecast for 2011/12 (current) marketing year versus a 5 year average of 71.6%. Sales of 259,000 metric tonnes are needed each week to reach the USDA forecast. Sales are running 24% behind last year's pace. The European Union granted export licenses for 252,000 tonnes this week, which pushed cumulative sales for the marketing year to 6.9 million tonnes as compared with 10.6 million tonnes last year at this time. With higher production, the slow export pace for the EU suggests a plentiful supply of exportable surplus wheat for second half of the marketing year. Argentina's production for the 2011/12 season was revised higher by the Buenos Aires Grain Exchange to 13.6 million tonnes, which was up from their previous forecast of 13.0 million. Some traders believe that US exporters are expecting sales to Egypt as a better possibility into February when Russia and Argentina begin to back away from the market. Ag Canada pegged ending stocks for the 2011/12 season at 6.7 million tonnes, compared with 6.1 million in November and 7.189 million last year.
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