July wheat was trading near 2 cents lower near 7:30 am central time and down 28 3/4 cents from the overnight highs. Outside market forces look somewhat positive with lower trade in the US dollar and a jump in equity markets. July wheat rallied as much as $1.29 3/4 cents from last Monday's lows before selling emerged overnight. The overnight rally pushed the market up to the highest level since October before some selling emerged. Fears of deteriorating crops in the US and some increased concerns that Russia, Kazakhstan and Ukraine production could be pinched further unless the weather shifts soon has helped to support. Traders see US good to excellent ratings dropping by 1-3% for this afternoon's weekly winter wheat update. Ukraine officials see a sharp drop in wheat production for the 2012 season at near 12 million tonnes from 23 million last year. Frost nipped the German production as well and officials see the winter wheat crop near 2.87 million tonnes, down 9.5%. July wheat capped off a strong week last week with a surge higher on the day. European milling wheat futures surged more than 5% to see 11-month highs. Paris milling wheat futures pushed to the highest level since June of last year before moving lower on the session overnight. Weather concerns for western plains in the US and portions of Ukraine and Russia for this week helped spark the buying and short-covering has emerged again to help support. Outside market forces were somewhat positive Friday with a little more stability in the US equity market and a strong gain in gold and corn helping to provide some support as well. The Commitments of Traders reports as of May 15th showed Non-Commercial traders were net short 49,058 contracts, an increase of 4,053 contracts for the week. Non-Commercial and Nonreportable combined traders held a net short position of 74,254 contracts. Open interest was down last week which suggests that much of the buying was short-covering from large and small specs. Commodity Index traders held a net long of 213,236 contracts, down 2,105.
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