March wheat traded 6 1/2 cents higher late in the overnight session. Outside market forces look supportive today with weakness in the US dollar back down to the level of early January plus a more positive tilt to energy and metal markets today. Wheat exports are sensitive to the US dollar movement and today's set-back in the US dollar plus news of improving US exports last week has helped to market bounce. Traders indicate that the US is more and more competitive on the world market and this could help boost exports over the near-term. March wheat closed 4 3/4 cents higher on the session Friday and up 8 1/4 cents for the week. Ideas that US wheat is getting to be more competitive on the world market plus some talk that both the US and Ukraine may be at risk for some winterkill issues over the next few weeks helped to support an early bounce to challenge Tuesday's highs. However, snowfall in Ukraine ahead of the cold is helping to minimize loss fears and the US plains also look to stay warm enough to avoid winterkill issues. Traders are somewhat concerned about dryness in the northwest US and into Canada. The buying fizzled out on Friday and the market followed the sell-off in soybeans to push lower on the day into the mid-session but strength in corn and higher than expected weekly exports helped to support the bounce and strong close. Net weekly export sales came in at 587,200 metric tonnes for the current marketing year and -3,000 for the next marketing year for a total of 584,200 which was higher than expected. As of January 12th, cumulative wheat sales stand at 79.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 77.7%. Sales of just 264,000 metric tonnes are needed each week to reach the USDA forecast. The Commitments of Traders reports as of January 17th showed Non-Commercial traders were net short a new record high 60,698 contracts, an increase of 10,561 contracts in just one week. This leaves the market in an oversold condition. Non-Commercial and Nonreportable combined traders held a net short position of 85,917 contracts, up 15,671 for the week and also a new record high. Commodity Index traders held a net long position of 200,285 contracts, up 11,883 for the week and a positive trend. India wheat plantings for the October to January 20th time frame reached 29.4 million hectares from 29.09 million last year. This leaves the crop on track to reach or exceed last year's record production of 86 million tonnes.
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