May wheat was trading 1 cent lower late in the overnight session. Outside market forces look somewhat negative today with a strong tone to the US dollar and weakness in equity and metal markets. With a bearish weather outlook for the winter wheat crop in the US and a fast start to the spring wheat crop, the market has remained under selling pressure. Trend following funds hold a hefty net short position, US prices are cheap relative to other world offers and European wheat production is still questionable so the market will not need much in the way of positive news to turn up. For now, positive news is lacking. The weekly Winter Wheat Conditions report showed that 64% of the crop is rated good/excellent compared to 61% last week and 36% last year. The 10 year average for this time of year is 49%. The highest percent rated good/excellent was 78% in 1993. Ohio slipped 4% to 46% but Kansas jumped to 69% good to excellent from 65% last week and 26% last year. The weekly Spring Wheat Planting report showed that a whopping 37% of the crop is planted compared to 21% last week and 5% last year. The 10 year average for this time of year is 11%. The highest percent complete prior to this year was 27% in 1992. North Dakota is 27% complete from 0% last year and Minnesota is 56% complete from 0% last year. May wheat gave back all of the early small gains to close down on the session yesterday and well off of the early peak. The market was trading moderately higher on the day into the mid-session but saw choppy to lower trade for much of the day and pushed to new lows for the session late. The more bullish tilt to outside market forces plus talk of the oversold condition of the market helped to spark some early buying. Talk of weekend cold weather in the eastern Corn Belt helped to provide some support as the crop is advancing and could be more vulnerable to colder weather. Morocco officials indicated that they had at least 3-months of domestic needs covered with current wheat stocks. Milling wheat futures in Paris jumped more than 1% which helped to provide some support. However, speculative selling was active late in the day. German Farm Coops believe the winter wheat crop will come in near 21.5 million tonnes from 24.2 million as their March estimate due to cold weather damage. Ethiopia bought 35,000 tonnes of wheat from Russia. Record high prices for rice in China could spark increased imports of rice by China to near 2 million tonnes for 2012 which would push China to become the world's third largest importer.
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