May wheat was trading 6 cents lower late in the overnight session. Outside market forces look slightly positive today with a weaker US dollar and a rally in gold. The turn down in European milling wheat overnight plus ideas that the Friday rally was overdone helped to pressure the market overnight. With a jump in planted area this season, traders see negative news coming out of the USDA Outlook Forum for later this week and this may have helped to pressure the market overnight as well. While the central and southern plains wheat areas could use more rain, there is only light coverage expected in the next week or more. Snow in the northern plains is seen as somewhat negative. May wheat closed 12 1/2 cents higher on the session Friday and this left the market with a gain of 9 3/4 cents for the week last week. Talk that China may be looking to import significant quantities of wheat helped to support. A continued flow of positive export sales news plus a rally in the other grains and a positive tilt to outside market forces helped to support. Private exporters reported a sale of 120,000 tonnes of US soft red wheat to Egypt. Talk of the oversold technical condition of the market and ideas that fund traders still hold a hefty net short position in wheat helped to support as well. News that Ukraine will limit wheat exports for the remainder of the marketing year was also seen as a positive force. July KC wheat closed 15 cents higher on the week. The Commitments of Traders reports as of February 14th showed Non-Commercial traders were net short 50,614 contracts, an increase of 12,877 contracts for the week and the selling trend is seen as a short-term negative force. Non-Commercial and Nonreportable combined traders held a net short position of 71,109 contracts, up a whopping 12,625 contracts for the week. While the selling is a short-term bearish force, this leaves the market holding a near record net short position and vulnerable to bouts of short-covering if resistance levels are violated. South Korea bought 35,000 tonnes of wheat from Australia over the weekend. On top of all of the production issues with Ukraine for the 2012 crop season, Kazakhstan officials believe the 2012 grain crop will be down to 13-15 million tonnes from 27 million last year. Pakistan indicates that the country may export up to 1.5 million tonnes of wheat in 2012 after three years of bumper crops.
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