Markets

Pre-Opening Wheat Market Report

July wheat was up 5 1/2 cents late in the overnight session. Outside market forces are slightly negative this morning, but wheat is most sensitive to the US dollar, which is slightly lower. This is providing an offset to weaker energy prices. The outlook for drought-busing rains for central Europe next week remains a negative factor for the market, but the downside was limited this week by the record slow plantings pace for US spring wheat and from a warm and dry outlook for next week in China and in Russia. Ideas that Russia may not have large quantities of higher quality wheat was seen as a positive force yesterday. The market saw a strong recovery and higher close yesterday after coming under pressure for much of the week. A continued wet forecast for the northern plains, a weaker US dollar and expanding drought conditions in Texas and Oklahoma were all factors which helped support the market early. In addition, a hot and dry forecast for Russia and those ideas that Russia may not have as much high-quality wheat for export as feared earlier this week were also seen as positive factors. The Ukraine Agricultural Minister cut the forecast for grain exports for the 2011/12 season to 15-18 million tonnes, down from its previous estimates of 19-20 million. Fears that the spring wheat planting progress will remain on a record low pace into next week helped to support the rally, as the market recovered part of the recent steep, 3-day break. More rain is in the forecast for Montana and North Dakota next week. Traders see the weekly export sales report, for release before the opening today, showing sales of around 350,000 tonnes. European wheat futures pushed 0.4% higher overnight, and this may provide some support today.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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