July wheat was trading 5 1/4 cents higher near 7:00 am cst. Outside market forces look mixed today with a weak dollar and firm stock market but energy and metal markets are weak. The USDA Crop Production and Supply/Demand updates this morning should set the tone. Traders will key in on the winter wheat production number which is expected to come in near 1.650 billion bushels which would be down 44 million from last month. Below 1.630 or above 1.670 should have an impact. Other key numbers for the report include the ending stocks which were 768 million bushels last month for the 2011/12 season and 735 million for the 2012/13 season. The market is likely to turn up on any number under 745 for 2011/12 and under 715 million for 2012/13. The market is likely to turn down on any number over 765 for 2011/12 and over 745 for 2012/13. Traders look for total wheat production near 2.222 billion bushels. The weekly Spring Wheat Conditions report showed that 75% of the crop was rated good/excellent compared to 78% last week and 68% last year. The 10 year average for this time of year is 72%. The weekly Winter Wheat Harvest report showed 35% of the crop harvest is complete compared to 20% last week and 16% last year. The 10 year average for this time of year is 11%. The weekly Winter Wheat Conditions report showed 53% of the crop is rated good/excellent compared to 52% last week and 35% last year. Late weakness in corn and a turn sharply lower in the US stock market helped to pressure the wheat market late yesterday to give back all of the early gains to close near unchanged on the day. The rally in the US dollar and weakness in other commodity markets and weakness in the stock market turned outside forces from bullish to bearish and this sparked selling pressure. The outlook for declining US and world ending stocks and an adjustment lower for winter wheat production for the USDA reports are forces which helped to support. Weekly export inspections came in at 21.5 million bushels which was right in the range of estimates. Inspections need to average 22 million bushels per week to reach the USDA projection for the new season.
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