Pre-Opening Wheat Market Report for 10/19/2010
Related Keywords: Agriculture Email Print | December wheat was 8 1/4 cents lower overnight. The dollar was higher. December wheat started higher in the overnight session before easing during the latter half of that session. Selling accelerated into the tail end of the overnight session as the dollar rallied. Traders said that the strength in the dollar came on a boost in interest rates in China as the government there attempts to slow the economy and keep a lid on inflation. One analyst noted that a more hawkish attitude on inflation in one of the world’s largest economies may be curbing inflationary fears elsewhere in world commodity markets. In other currency action, the Australian dollar moved above parity to the US dollar last week and it remains near that level into the start of this week. This is thought to be slowing Australian wheat sales and boosting the competitive position of US wheat on the world market. This week’s export inspections for wheat were 20.79 million bushels, down from 32.9 million last week. Cumulative inspections stand at 34.4% of the USDA’s export projection for 2010/11 versus a 5-year average of 41.8%. Inspections need to average 24.9 million bushels each week to reach the USDA’s projection. After yesterday’s close, Egypt announced a tender to buy 55,000-60,000 tonnes of soft wheat from the US, France, Germany, Argentina, Canada, Australia and/or the UK. Weather in the US remains mainly dry in hard and soft red winter wheat areas although some welcome moderate rains are expected in the southern Plains into the end of the week. This may bring light to scattered moderate rains into the central and western Midwest into the weekend along with Michigan and extreme northern Indiana and Ohio.