September wheat was down 3/4 of a cent late in the overnight session. Outside market factors look positive today, with a weaker US dollar and higher equity markets. The market saw solid gains yesterday, as a tighter than expected supply of spring wheat and increasing demand from livestock feeders lent support. Higher corn values relative to wheat have helped boost domestic demand. However, the upside was limited by bearish news on world wheat supply, with big adjustments higher for production from Russia and Ukraine, up 3 million tonnes each. This could lead to lower US exports, as these countries are aggressive exporters. Algeria bought 500,000 tonnes of optional origin milling wheat overnight. September wheat closed sharply higher on the session yesterday but more than 20 cents off of the early highs. Kansas City and Minneapolis wheat gained on Chicago wheat, as hard wheat ending stocks were revised lower and soft red stocks higher. Speculative buying and short-covering was active early in the session, but after the initial flurry of buying, the market gave back more than half of the early gains. The USDA reports were considered neutral for wheat, but the market found support from the data in the other grains. Wheat production was pegged at 2.077 billion bushels, which was about as expected. Planted area was revised down by 1.3 million acres, but yield was revised higher. Other spring wheat production came in at 522 million bushels versus trade expectations at 541 and from 616 million last year. US ending stocks for 2011/12 came in at 671 million bushels, which was right in line with expectations and down from 861 million last year. The estimate was up from 670 million last month. While ending stocks for total wheat was near unchanged from last month, hard spring wheat ending stocks were revised down by 30 million from last month to 143 million and down from 185 million last year. Hard winter wheat stocks were up 23 million from last month to 222 million, but this was far less than the 386 million last year. On the other hand, soft red wheat ending stocks were revised higher by 14 million bushels from last month to 197 million and up from 170 million last year. This would be the second highest soft red stocks on record. For the world report, 2011/12 ending stocks were pegged at 188.87 million tonnes, which was much higher than traders had expectedand up from 182.19 million tonnes estimated last month. Last year's ending stocks totaled 191.74 million tonnes. Weekly export sales for wheat came in at 376,100 metric tonnes. Sales of 440,000 metric tonnes are needed each week to reach the USDA forecast. The EU granted export licenses for 143,000 tonnes this week, which pushed cumulative sales to 1.3 million versus 1.5 million last year at this time.
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.
