May wheat was trading 4 1/4 cents higher late in the overnight session. Outside market forces carry a slight positive tilt today but the focus of attention is on the USDA Supply/Demand updates. Traders see better feed usage and firm exports as reasons to suspect a tightening USDA ending stocks estimate for the 2011/12 season. Traders see stocks near 790 million bushels as compared with last month's estimate of 825 million bushels. The focus will also be on the corn ending stocks estimate. The new crop outlook continues to improve; especially if the crop can avoid a deep freeze in the weeks just ahead. The weekly Winter Wheat Conditions report showed that 61% of the crop is now rated good/excellent compared to 58% last week and 36% last year. The 10 year average for this time of year is 50%. The highest percent rated good/excellent was 79% in 1993. The weekly Spring Wheat Planting report showed that 21% of the crop is planted compared to 8% last week and 3% last year. The 10 year average for this time of year is 5%. The previous highest percent complete was 14% in 1992 so the pace this season is clearly a new record. North Dakota is 17% planted vs. 1% on average and South Dakota is 52% complete vs. 6% as the 5-year average. May wheat managed a slight rally yesterday even with weakness in the other grains. The market seemed to get an early bounce on short covering off ongoing fears of cold weather and perhaps from position squaring ahead of the USDA report. However, the wheat market quickly traded back toward the near the lows of the day, as the fear of cold declined and outside market forces stepped and weighed on a number of physical commodity markets like wheat. Weekly USDA wheat export inspections, released 1/2 hour after the open, came in at 17.6 million bushels, which was about as expected. Inspections for the previous week were revised up from 15.391 million to 15.835 million. The COT reports as of April 3rd showed non-commercial traders were net short 40,157 contracts, an increase of 2,707 on the week but still short of the record fund net short position of 50,921 contracts. This leaves wheat vulnerable to short-covering if there is a supportive surprise for wheat or corn for the report.
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