Pre-Opening Wheat Market Report for 11/18/2010
Related Keywords: Agriculture Email Print | March wheat was 21 1/4 cents higher overnight. The dollar was lower. Commodity and equity markets moved higher overnight in conjunction with a substantial drop in the dollar, with the March wheat contract pushing back above its October lows in the process. Traders said that a return of dry weather to the US hard red winter wheat belt contributed to the strength in wheat yesterday and overnight along with the fact that trend-following funds are holding a net short position in wheat that was the largest in any agricultural market as of the latest Commitments of Traders report. In addition, Egypt is back in the market this week for both hard and soft wheat. They are looking to buy 55,000 to 60,000 tonnes of hard wheat and additional cargoes of soft wheat for shipment in late January. Results are expected this morning. The USDA will also issue its latest Export Sales report this morning and some traders are looking for a weekly sales total of up to 600,000 tonnes. This would be down from last week’s total of 832,000 tonnes, but above the 441,100 tonnes needed each week to reach the USDA’s current export projection in wheat. In yesterday’s action, March wheat finished higher on the day, despite seeing its gains trimmed after the market peaked in mid session. Wheat gained on both corn and soybeans yesterday as those markets finished lower in old crop contracts. Traders said that the bounce in wheat was mainly technical with a boost from forecasts that call for more dry weather in the US Plains hard red winter wheat belt over the next week. The east central Plains and much of the southern Plains saw welcome rains last week, but the western and north central Plains remained dry. An additional 7 days of dryness in the western Plains would put substantial additional stress on the hard red winter wheat crop there as the crop nears dormancy.