July wheat was up 17 1/4 cents late in the overnight session. Outside market forces were positive this morning with strength in energy and metal markets and a weaker US dollar helping to support. Deliveries for May wheat were zero this morning. The hot weather over the weekend in Kansas plus the outlook for dry weather for the southern plains for much of the next week was enough to support sharply higher trade overnight. The weather issues are also a large concern for the spring wheat areas in the north, and traders will monitor weekly crop progress reports closely. Dryness in Europe and cold and wet weather for Canada remain other positive factors for the market to absorb. More rains are moving into China's wheat areas early this week, but much of the weather improvements were likely "priced" on the collapse in wheat prices last week. July wheat managed to move to itslowest level since March 17th on Friday before closing higher on the day and up 19 1/2 cents from the lows. The reversal plus the oversold technical condition of the market may help attract some technical buying early this week. Relief from the aggressive selling from fund traders and a threatening weather forecast for the southern plains was thought to be the primary reason for the higher close on Friday. The heat on the weekend has traders looking for further stress and deteriorating crop conditions for the winter wheat crop. The Kansas crop tour sees production near 256.7 million bushels, the smallest crop since 1996 and down 29% from last year. For the March 31st Canadian Grain stocks report, total wheat stocks were pegged at 15.6 million tonnes which was above trade expectations but down 8.8% from last year. In Russia, Putin indicated that a ban on grain exports imposed following the drought may be lifted if the country has sufficient grain stocks, but once again, he did not indicate when it may happen. The Commitments of Traders reports as of May 3rd showed non-commercial traders were net long 23,127 contracts, a decrease of 6,528 for the week. Non-commercial and nonreportable traders combined held a net long position of 6,411 contracts, down 8,862 contracts for the week. The selling trend is seen as a short-term negative force. Commodity index traders held a net long position of 217,201 contracts, down 292 for the week.
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