May wheat was up 6 cents late in the overnight session.
Outside market forces look supportive today as the weaker US
dollar and new highs for gold point to a more inflationary
environment ahead. The market saw fairly aggressive selling
pressures yesterday. Trade focus will be on the USDA
supply/demand update this morning, but weather issues look to
become more and more prominent in the weeks just ahead. Mostly
dry and hot weather appears to be stressing the southern and
western plains region, and there does not appear to be much rain
in the outlook. Some rains are expected to hit northern and
eastern areas of the plains. European weather is dry and warm,
and traders will monitor this situation as well, as dryness may
impact winter wheat crops. China areas are also looking mostly
dry, and increased irrigation may be necessary. Traders are
looking for an increase in 2010/11 US ending stocks for the
supply/demand report this morning of about 15-20 million bushels
from last month's USDA estimate of 843 million bushels. World
ending stocks are also expected to increase slightly from the
181.9 million tonnes estimated last month. May wheat closed
moderately lower on the session yesterday and pushed to a
4-session low. Strength in corn and some talk of stressful
weather for the plains ahead helped to support the early strong
gains. However, news of an earthquake in Japan helped spark an
aggressive long liquidation trend in many commodity markets, and
while many markets saw a quick recovery, wheat remained under
heavy selling pressure into the mid-session. Talk of increased
rain chances for parts of the plains may have helped to hold the
market down. Weekly export sales came in at 458,800 tonnes for
the current marketing year and 264,100 for the next marketing
year for a total of 722,900. Cumulative wheat sales stand at
97.5% of the USDA forecast for 2010/11 (current) marketing year
versus a 5 year average of 93.2%. Weekly old crop sales of just
97,000 tonnes are needed each week to reach the USDA forecast.
The EU granted export licenses of 286,000 tonnes this week, which
pushed cumulative exports for the entire 2010/11 season to 15.7
million tonnes, up from 13.7 last year at this time.