March wheat was down 8 cents overnight. Outside markets look negative. Poor crop conditions in the US, dry conditions in China and some food inflationary fears are factors which have helped spark the run to the early January highs in wheat, but speculative long liquidation selling yesterday and again overnight has sent March wheat right back down at the low end of a 9-session range. March wheat closed sharply lower on the session yesterday and posted new lows late in the day. While outside market forces were negative, talk that timely snow ahead of the cold in the plains will help insulate the crop from cold weather added to the negative tone. A strong US dollar combined with fears of increased index fund trader selling helped to pressure the market. Dryness in the plains and solid export sales helped provide support. The tender wire appears much more active. Algeria bought 350,000 tonnes of optional origin wheat for March delivery. The EU granted export licenses for only 72,000 tonnes of soft wheat which is relatively small but this pushed the total for the marketing year to 11.2 million tonnes as compared with 8.6 million last year by this time. Net weekly export sales for wheat came in at 464,700 metric tonnes. As of December 30, cumulative wheat sales stand at 76.6% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 75.1%. Sales of 365,000 metric tonnes are needed each week to reach the USDA forecast. Kansas winter wheat crop as of Jan 1st is rated just 27% good to excellent compared with 59% as the 5-year average and 69% last year. In Henan province of China, where about one-third of that country’s wheat crop is grown, there has been little or no rain since October 1st. Rainfall in the October to December quarter was 86% less than last year and was the lowest total since 1961, according to the Ministry of Agriculture there

Bron: CME