September wheat was up 12 1/4 cents late in the overnight session. Weakness in the US dollar and strength in other grains and other commodity markets lent support. The debt ceiling crisis resolution may provide a short term boost in buying, but the upside may be limited by cheaper wheat prices in Russia and a lack of a significant weather issue in the northern plains crops despite the late plantings. An Indian firm sold 50,000 tonnes of rice and 50,000 tonnes of wheat to Bangladesh, and India still has a significant surplus of wheat in storage and a record high crop to absorb short term. The International Grain Council last week pegged world wheat production at 674 million tonnes up from last month's estimate of 666 million and 651 million for last year. In the July USDA report world production was pegged at 662.4 million tonnes, so the news was seen as bearish. The adjustment higher was mostly from Europe, Russia and Ukraine. Severe heat may have done some damage in Russia, but the heat is expected to ease this week, and losses are thought to be minor. Ukraine is expected to harvest nearly 51 million tonnes of grain this year, up from 39.2 million last year. Harvest reached nearly 30 million tonnes as of August 1st. Wheat yield was said to be 3.36 tonnes per hectare, compared with 2.8 tonnes last year at this time. A weaker US dollar may have helped provide underlying support for the market on Friday, but with Russia still undercutting other world exporters, selling emerged to drive the market lower on the session and lower on the week. Weakness in the other grains and follow-through technical selling from the poor close Thursday helped spark more long liquidation selling and weaker prices early. Egypt bought 240,000 tonnes of wheat, with all of the business going to Russia, which was not a surprise. The sale was done at a price near $255/tonne. On July 26th, Egypt bought 120,000 tonnes at around $250/tonne. On July 15th, Egypt bought 180,000 tonnes from Russia for around $246/tonne. Russia is still pricing their wheat well under the rest of the world, but their selling prices are clearly higher. The market was trading near the lower end of the 13-session consolidation late on Friday, before the bounce overnight. Iraq is tendering for 100,000 tonnes of wheat. The Commitments of Traders reports as of July 26th showed non-commercial traders were net short 24,082 contracts, an increase of 8,803 contracts for the week. The selling trend is seen as a short-term bearish force. Nonreportable traders were net short 22,765 contracts, an increase of 943. Commodity index traders held a net long position of 207,894 contracts, up 744.
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