July wheat was trading 10 1/4 cents lower near 7:30 am cst. Outside market forces look bearish today with a jump in the US dollar and euro zone uncertainties helping to pressure energy and metal markets. The turn down in financial markets has sparked selling overnight as some traders believe the surge higher yesterday was a bit overdone. Traders expect to see a significant revision lower in production for the report on Tuesday but yield reports are mixed. Questionable weather for the Black Sea region and China has traders looking for significant revisions lower in world supply as well. July wheat closed 17 1/2 cents higher yesterday as short-covering emerged with strength in the other grains and a slightly positive tilt to outside markets. The ongoing harvest for winter wheat, slow weekly export sales news and news of hefty supply from India were factors which may have limited the advance. Weekly export sales came in at just 165,700 metric tonnes which was well below expectations. Traders see a decline in production and ending stocks for the US and the world for the reports on Tuesday. US ending stocks for both the old crop and new crop seasons are expected to slip about 20 million bushels. Old crop ending stocks were 768 million bushels last month and new crop was 735 million bushels. Traders see a 50-60 million bushel decline in winter wheat production from 1.694 billion bushels projected in May. Traders also see world ending stocks slipping down about 3 million tonnes from 188.13 million in May but there are some expectations for a 4-6 million tonne drop in Russia and a 2-3 million tonne drop in China due to weather. The Buenos Aires Grains Exchange lowered their estimate for the new season wheat plantings to 3.8 million hectares from 4.0 million as their previous forecast. This is down from 4.6 million last year. Saudi Arabia may shift to more soft wheat imports to meet local demand. The country may see annual imports climb to 3.4 million tonnes by 2016 as they phase out domestic production to conserve water. Imports this year are expected near 2.2 million tonnes. India grain stocks on June 1st surged to a record high 50.2 million tonnes. India officials indicate that the country has 5-6 million tonnes of exportable surplus.
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