September wheat was up 1 1/6 cents late in the overnight session after trading lower early. Outside market factors look to be shifting from negative to positive. The market has followed the other grain markets lower in recent days, but it managed to hold inside of yesterday's range on the break overnight and traded slightly higher on the day late in the session. Overnight news was somewhat supportive, with new demand emerging from Egypt and US spring wheat crop conditions declining. The weekly Crop Progress report showed 66% of the spring wheat crop was rated good/excellent as of Sunday, compared to 70% last week and 82% last year. The crop is now 6% harvested compared to 17% last year. The 10 year average for this time of year is 21% harvested. The winter wheat harvest is 85% complete compared to 81% last week and 87% last year. The 10 year average for this time of year is 92%. For the USDA production and supply/demand updates on Thursday, traders see US wheat production down about 20 million bushels from 2.106 billion bushels last month. However, world production is expected to be revised higher, which might cause some adjustment lower in US exports as well. Traders see world ending stocks for the 2011/12 season to be adjusted higher by about 500-600 million bushels from 182.19 million tonnes last month. September wheat closed sharply lower on the session yesterday and down to its lowest level since July 12th. Fears of a slowing world economic condition and expectations that Russia will continue to compete for the world export market helped to drive the market sharply lower. The sharp drop in the stock market and the downgrade of US credit was seen as bearish. European wheat futures plummeted, adding to the negative tone early. The USDA reported that 100,000 tonnes of US hard red winter wheat was sold to an unknown destination for the 2011/12 season. The Russian Agriculture Ministry indicates that about 30% of the area planted for grain has been harvested and so far production has reached 39.8 million tonnes. Yield is thought to be near 3.0 tonnes per hectare, up from 2.16 last year. Russia is sticking with an estimate of total grain production near 85-90 million tonnes from 61 million tonnes last year, but many private forecasts are higher. Algeria is tendering to buy 50,000 tonnes of optional origin wheat. The weekly export inspections for wheat, released during the session yesterday, came in at 25.2 million bushels, which was above trade expectations and above the 22 million average needed each week to reach the USDA projection. After the close, Egypt announced a tender for 55,000-60,000 tonnes of US soft white wheat and also 60,000 tonnes of optional origin milling wheat.
Join the Discussion