March wheat was 21 1/2 cents higher overnight. The dollar was modestly lower. Deliveries against the December wheat contract were 2,232 contracts with the total for the delivery period to-date at 12,632. Wheat surged again overnight as weather concerns in the US and Australia sparked buying in cash and futures markets. This concern currently centers on higher protein wheat which has been in strong demand on the world market in recent months. Last year’s US crop saw gains in quality for higher protein wheat varieties which shifted US export sales in the direction of hard red winter and hard red spring wheat and away from soft red wheat which did not see improved quality last year. With the dry conditions in the US largely impacting the hard red winter wheat belt and with rains in eastern Australia raising concern over potential quality downgrades there, buyers are said to be getting anxious to up their coverage for the first half of 2011. Ideas that the EU may have limited soft wheat available for export in early 2011 could help to boost soft wheat sales by the US as well according to some traders. One analyst notes that fears of food inflation are an underlying factor that is boosting buying. This factor has reportedly kept India from allowing unrestricted private wheat exports despite their large surplus holdings of wheat. For several weeks in a row, US export sales have been running well above the average needed each week to reach the USDA’s current export projection. Yesterday’s total was in line with trade expectations, but it was more than 60% above the weekly ‘average needed’ at 663,300 tonnes for the current marketing year. Sales for 2011/12 were 40,900 tonnes for a combined total of 704,200. Cumulative wheat sales stand at 68.2% of the USDA forecast for 2010/2011 versus a 5 year average of 69.4%. Sales need to average 403,000 tonnes each week to reach the USDA forecast.

Bron: CME