May wheat was trading 6 1/2 cents lower late in the overnight session. Outside market forces look slightly negative with a stronger US dollar and weakness in energy and metal markets but firm trade in the US stock market may provide some support. A notable improvement in rain for Western Europe last week and for the central US plains could help keep the market on the defensive this week. In addition, traders see better rain for parts of France and Spain for the coming week. Russia wheat prices were lower last week with a noted decline in new demand. Russia exports have reached a record volume of more than 18.5 million tonnes for the July to mid-April time frame. Exports for the year could reach 20.5 million tonnes from 3.98 million last year. Wheat is cheaper than corn in many parts of the southern plains and this could keep feed usage high. In addition, traders see decent demand for US wheat compared with other countries due to competitive pricing. Crop condition reports this evening could be mixed and traders will be watching for signs of deterioration in soft red areas which were exposed to freezing weather last week. However, further improvements in Kansas could be an offset to pull crop conditions higher. May wheat closed 15 3/4 cents lower on the session Friday and down 15 cents for the week. Ideas that the rally Thursday was a bit overdone and a turn down in outside market forces helped to sparked the early selling and the selling continued to drive the market sharply lower on the session and to the lowest level since March 30th. The steep rally in the US dollar and more talk of improving crop conditions ahead helped to encourage more selling and the weakness in the other grains added to the negative tone. Morocco bought 180,000 tonnes of soft wheat with the origin unknown. Slower China growth was seen as a negative force for commodity markets in general. The Commitments of Traders reports as of April 10th showed Non-Commercial traders were net short 48,537 contracts, an increase of 8,380 contracts for the week. The selling trend is seen as a short-term negative force but the net short position is near an extreme. Non-Commercial and Nonreportable combined traders held a net short position of 69,614 contracts, up 11,246 contracts for the week. Commodity Index traders held a net long position of 219,071 contracts, up 1,545.
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