Pre-Opening Wheat Market Report for 9/15/2010
Related Keywords: Agriculture Email Print | December wheat was 2 cents higher overnight. The dollar was substantially higher. Yesterday was the last trading day for September futures. After a relatively weak performance yesterday in the face of a strong corn market and a lower dollar, wheat managed to trade higher overnight despite a substantial recovery rally in the dollar. This leaves the December wheat contract near the high end of the past month’s trading range. Traders indicate that the market is being supported by a strong export market and a generally strong commodity market sector as it digests somewhat improved production news from the Southern Hemisphere. Other news is light today as European traders look to assess yield and quality losses in Germany after the harvest rains there, while the Russian government reported earlier in the week that soil moisture is still short-to-very short in some 70% of that country’s winter wheat growing areas prior to planting. An arm of The Australian Bureau of Agricultural and Resource Economics (ABARE) raised its wheat production forecast earlier this week by 13% to 25.1 million tonnes. This is the biggest estimate of that crop by any public agency so far. Australia also raised its wheat export projection by 20% over last year. Egypt said yesterday that it is tendering for 55,000 to 60,000 tonnes of soft wheat or general milling wheat. Results are expected this morning. Traders indicate that the market may be encouraged if the US gets a substantial piece of this business. Morocco has formally approved licenses to import 1.2 million tonnes of wheat between September 16th and December 31st. This confirms reports from two weeks ago, but it is not an actual purchase of wheat. Much of this demand will be for soft wheat and this may mean an aggressive battle between the US and France in this market in coming months. In the US, moderate to locally heavy rains fell in the central Plains overnight and into this morning and this is considered mostly welcome. In yesterday’s action, wheat lost ground on the reports of an improved production outlook in Australia along with selling in wheat by spreaders versus the surging corn market.