September Chicago Wheat is trading 11 cents lower near 7:30 am CST. Kansas City and Minneapolis Wheat are lower as well. Outside markets were slightly negative with European Stocks and the EURO trading lower overnight after 3 days of stronger trade. The results of a German 10 year bond auction will provide some direction for traders today. US Stocks are trading slightly lower this morning and the US Dollar is stronger, adding pressure to US commodities. Losses in Chicago wheat have accelerated overnight as corn drifts lower and news out of Russia and Ukraine suggest no export restriction will be needed at this point in time. The Ukraine Farm Ministry pegged Ukraine's grain exportable surplus between 21-23 million tonnes, which includes 5 million tonnes of wheat. This would equal the amount exported by Ukraine in 2011/12 and is 1 million tonnes higher than the 2012/13 USDA estimate. Temperatures across spring wheat growing regions in Russia are expected to remains hot and dry for the next 10 days, followed up with a period of more stable conditions. This will likely be too late as the wheat crop is nearly ready to be cut and yield reductions at this point are irreversible. The trade expects slight cuts to Black Sea wheat production on Friday's report. Russia could be cut from 49 to 45 million tonnes and it is not out of the question to see Kazakhstan and Ukraine production cut.50-1 million tonnes each. Australian production will likely be kept unchanged at 26 million tonnes until more time has passed but the current weather outlook suggests the lack of rainfall is already affecting wheat crops in Southwest Australia. Rainfall will be critical in August and September given the El Nino outlook for the country. Major importers in the Middle East and North Africa continue to come to market as prices setback. Algeria bought 225,000 tonnes of wheat overnight which was likely Black Sea or European origin. Egypt has been missing from the tender lineup but months ago they announced they had purchased a record amount of domestic wheat to supply their needs. A significant break in price towards $7-7.50 would likely bring on a tender. The South Korea Feed Leaders Committee bought 50,000 tonnes of feed wheat from India on Tuesday. The Korean Feed Association is seeking 110,000 tonnes of feed wheat for October and November delivery. The feed wheat tenders from Korea provides further evidence of the global shift to feed wheat from corn. Kansas and Nebraska saw slight declines in short to very short topsoil moisture levels vs. last week. The ratings of 96% were revised lower to 94% but still suggest conditions are far too dry. Since August 6th, the panhandle and southern Oklahoma has received.25 to.50 inch. Northwest Kansas and the central third of Kansas have seen close to a.25 to.50 inch with local amounts near 1 inch. Continued rainfall will be needed in August and September to reach acceptable soil conditions for fall planting.
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