March wheat was 13 1/4 cents higher overnight. The dollar was lower. Deliveries against the December wheat contract were 714 contracts with the total for the delivery period to-date at 14,889. Ongoing weather concerns in the US, China and Australia continue to bolster wheat, with an added boost coming from a lower dollar and concern over inflation. Buying during the overnight session took the March contract through the highs of early November to the March contract’s highest level since August 6th. That was the day that the high for the summer rally was established. Australia’s Bureau of Agricultural and Resource Economics and Sciences said today that overall wheat production is headed for a record large 26.8 million tonnes, up from their previous estimate of 25.1 million. However, they indicate that recent heavy rains have hurt crop quality. This is similar to what happened to the wheat harvest in Germany this past summer. Dry weather continues to prevail in the hard red winter wheat belt on the US Great Plains despite some very light precipitation seen in western Kansas. This dryness is expected to continue for the next 10 days in the western Plains with one analyst noting that extreme dryness has migrated into the eastern Plains to some extent over the past two weeks. The USDA announced a sale of 160,000 tonnes of US hard red winter wheat to an unknown destination for 2010/11 yesterday. This came amid concern that higher quality/higher protein wheat such as US hard red winter wheat will be less available on the world market in 2011. The expected downgrading of the wheat crop in eastern Australia adds to those concerns. However, Pakistan announced that it would allow private sector exports of 1 million tonnes of wheat. This follows a 3-year ban that was based on shortages and high domestic food prices. This week’s export inspections for wheat were 19.2 million bushels, down from 22.3 million last week. Inspections need to average 26.2 million bushels each week to reach the USDA’s current export projection. Cumulative inspections stand at 45.8% versus a 5-year average of 54.1% at this point in the marketing year.

Bron: CME