September wheat was down 7 cents late in the overnight session. Outside market forces are mixed to slightly positive for wheat with a weaker US dollar and another new all-time high for gold helping to support. Wheat is having a tendency to follow the other grains recently and weakness in corn and soybeans helped to pressure the market overnight. Fears of continued price competition from the Black Sea region has helped to pressure the market in recent weeks. Russia's Grain Union raised their forecast for the grain crop this year to 89-92 million tonnes from 85-90 previous and from 61 million tonnes last year. European wheat futures were higher overnight as traders await any damage to quality of the French and German wheat crops due to too much rain into the harvest and after dryness in the spring. Iraq wheat production is expected to reach 2.2 million tonnes this year and near 3 million tonnes next year due to improved irrigation. September wheat traded mostly lower on the session on Friday but strength in the other grains helped support higher trade late in the day and a moderately higher close but the market was still down for the week last week. European wheat prices fell for the third session in a row Friday and helped pressure the market early but short-covering supported the market late. The early weakness pushed the market to the lowest level since July 13th as traders are reporting good yields for the early harvest in Russia and Black Sea wheat is expected to remain priced well below US values. Some scattered rain and cooler weather is seen as beneficial to the northern plains wheat crop and this added to the negative tone early. A jump in the US dollar was also seen as a negative force despite a surge up in the metals. On top of the situation in the Black Sea region, traders also see the need for India to be a more aggressive exporter of wheat on the world market due to excess supply after the record high production this year. The annual spring wheat crop tour will be this week to help traders get a better gauge on the spring wheat crop which was planted late. There may also be some insight on the extent of lost acres due to the wet spring in the northern plains. The Commitments of Traders Futures reports as of July 19th showed Non-Commercial traders were net short 15,279 contracts which is a decrease of 7,294 contracts for the week. The short-covering tendency is seen as a short-term positive force. Commodity Index traders held a net long position of 207,150 contracts, down 6,202 contracts for the week.
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