March wheat was down 5 1/2 cents late in the overnight session. Outside markets were negative with commodity markets under pressure due to the interest rate hike in China. The jump in new tenders and fears of cold weather in the US helped support the recent bounce. Talk of the overbought condition of the market, ideas that the world and US ending stocks are still not too tight unless there are additional production issues this spring and talk of better moisture for crops in the US and China have been issues limiting the advance. India is expected to have a large crop due to expanded plantings. The market closed higher on the session yesterday but well off of the highs. A surge higher in import demand on the world market over the weekend helped support solid gains early in the session, but news that a bulk of the actual sales are going to other exporters plus weakness in other grains helped the market give back much of the early gains. Egypt bought 170,000 tonnes of US, Argentine and Australian wheat over the weekend, and aggressive new tenders were also announced from several North Africa and Middle East countries. Turkey tendered for 300,000 tonnes, Iraq for 100,000 tonnes and Algeria for 50,000 tonnes. Traders believe Iran and Saudi Arabia may also be in the market soon. After the weekend tender, Iraq bought 300,000 tonnes of wheat with 50,000 from the US and 250,000 from Australia. Iraq’s flour prices have tripled over the last two months, and this may have prompted the increased demand. The dry western section of the winter wheat belt might receive a trace to 1/2 inch of moisture this week, which could ease some of the stress. In addition, rain and snow is in the forecast for the wheat growing areas of China. Those areas have seen drought conditions recently, so this may reduce crop stress. Traders expect to see exports to pick up soon due to tightening supply at other key exporters. For this reason they suspect the USDA may lower ending stocks in its supply/demand update that will be released Wednesday morning. Traders are looking for a decline of 10 million bushels from the 818 million that was posted last month. Weekly export inspections for wheat, released during the session yesterday, came in at 29.7 million bushels, which was higher than expected but was slightly below the 30.5 million bushels needed earch week to reach the USDA projection. Cumulative inspections have reached 60.4% of the USDA forecast for the season, compared with the 5-year average of 68.9% for this time of the year.

Bron: CME