March wheat traded 5 cents higher late in the overnight session. Outside market forces look slightly supportive this morning with some weakness in the US dollar and strength in other commodity markets providing light support. Ideas that the cold weather in Eastern Europe has reached a peak and that major damage was avoided plus talk of larger world crops ahead helped to spark the 26 3/4 cent break off of Wednesday's highs to yesterday's lows. The market saw a light recovery bounce overnight. The India farm ministry pegged the 2012 wheat production at a whopping 88.31 million tonnes which would be a record high and up from 86.87 million tonnes last year. This opens the door for increased exports ahead as the country consumes about 76 million tonnes per year. The crop will be harvested in March and April. Wheat stocks in India are already burdensome. March wheat closed sharply lower on the session yesterday as the market corrected part of the steep gains from the past few sessions. The weakness in European wheat futures and ideas that the cold weather in Europe will subside and not cause too much damage to the winter wheat crop helped to pressure the market early. A turn from higher to lower on the day for the US dollar helped support a recovery bounce from the early lows but sellers were active late in the day to drive the market to new lows for the day. Net weekly export sales for wheat came in at 518,900 metric tonnes for the current marketing year and 35,200 for the next marketing year for a total of 554,100 which was a bit higher than expected. Sales of 231,000 metric tonnes are needed each week to reach the USDA forecast. The European Union granted export licenses for 178,000 tonnes this week which pushed cumulative sales for the 2011/12 season to 8.1 million tonnes as compared with 12.6 million last year by this date. Traders see exportable surplus grain in India, Australia, Europe, Argentina, the US and Canada as enough of a cushion if Russia slows or halts exports or if Ukraine suffers further damage to their winter wheat crop. Stats Canada will release stocks reports for key grains today and the market may also absorb news of good snow totals in the central plains.
Join the Discussion