July wheat was trading 4 1/2 cents lower late in the overnight session. Outside market forces look bearish again today with lower equity, energy and metals trade overnight. There were 89 deliveries this morning against the May wheat with the total for the month at 410. As long as outside market forces stay weak and corn is in a long liquidation mode, the wheat market may need to absorb further selling from fund traders. The weather looks favorable with improving crop conditions in the southern and western plains on more rains this week and the spring wheat crop is off to a fast start. After losing millions of acres to flooding last spring, traders will also be concerned that spring wheat planted acres come in well above intensions. Trader will monitor Ukraine and Black Sea region crops closely but with good crops in the US, Europe and Canada, there is a lack of short-term supply concerns. July wheat experienced two-sided choppy trade and closed slightly higher on the session yesterday. The higher close after posting a new low for the move is seen as a positive technical factor. However, the turn down in outside market forces overnight was enough to re-ignite the selling. While production numbers came in higher than expected, usage was also higher than expected and stocks are tightening. The tightening stocks situation for both the US and world for wheat is a positive force but stocks are plentiful. The USDA pegged wheat production at 2.245 billion bushels which is up 50 million from expectations and compares with 1.999 billion last year. Ending stocks for the 2011/12 season came in at 768 million bushels which was about 12 million below expectations and down from 793 million last month. For the 2012/13 season, ending stocks were pegged at 735 million bushels which is 50 million below trade expectations. World ending stocks for the 2011/12 season came in at 197.03 million tonnes as compared with 206.27 million last month as feed usage was revised sharply higher. For the 2012/13 season, world ending stocks were pegged at 188.13 million. Weekly export sales came in at 550,500 tonnes which was about as expected. Old crop sales of 95,000 metric tonnes are needed each week to reach the USDA forecast. The Buenos Aires Grains Exchange pegged the 2012/13 planted area for wheat at 4.0 million hectares, down 13% from last year. July KC wheat pushed to new lows overnight and down to the lowest level since July of 2010.
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