March wheat traded 5 3/4 cents lower late in the overnight session. Outside market forces look negative today with a strong US dollar and weakness in equity and metal markets. The negative outside forces seem to have pressured other grain markets more than wheat, perhaps because of crop concerns for Russia/Ukraine and also from news that fund traders did not lower their net short position as much as anticipated. March wheat closed 6 1/4 cents lower on the session Friday but managed to close 36 3/4 cents higher on the week. The continued push down in the US dollar failed to support the wheat market on Friday even with news of increased interest in US wheat. Weakness in soybeans and talk of the short-term overbought condition of the market after closing higher for six sessions in a row helped to spark some light selling pressures on Friday. Private exporters reported a sale of 133,200 tonnes of US wheat to unknown destination. The sales consisted of 70,700 tonnes of hard red winter, 36,100 tonnes of soft white wheat and 26,400 tonnes hard red spring. Iraq is tendering for 50,000 tonnes of wheat but excluded the US and Romania from the tender. Libya is tendering to buy 25,000 tonnes of wheat. March Kansas City wheat was down 9 cents on the session Friday but stayed inside of Thursday's range. Traders will monitor any potential damage from the cold weather situation in the Black Sea region to the winter wheat crops. Traders believe that about 20% of the Ukraine crop may be vulnerable to some winterkill damage. The Commitments of Traders reports as of January 24th showed Non-Commercial traders were net short 57,980 contracts, a decrease of 2,718 contracts for the week. The short-covering trend is seen as a positive force and this comes from a record net short position the previous week. Non-Commercial and Nonreportable combined traders held a net short of 80,111 contracts, down 5,806. Commodity Index traders held a net long position of 208,821 contracts, up a strong 8,536 contracts for the week and the buying trend is seen as a short-term positive force. Traders were somewhat surprised that trend-following fund traders (non-commercial with no index funds) were net short a record high 95,827 contracts. In general, traders had expected that more short-covering had already occurred.
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