March wheat was down 8 1/4 cents late in the overnight session. Outside markets influences were positive with the lower US dollar. The potential for some rain in the 10-day forecast for the eastern areas of the US winter wheat belt and the melting snow in other, drier western areas might could be of some benefit to the crops. In addition, China’s Agricultural Ministry indicated that recent snows have reduced the drought-hit areas of their winter wheat belt by 4%. The severe areas declined by 11.6% after the snow. Traders see a mostly dry forecast for the next week, but warming seasonal weather ahead will increase the need for irrigation or rain. The market is likely to remain hyper-sensitive to weather events in China in the next few weeks. Chinese officials claim they have plenty of wheat in storage to meet demand if there is a weather issue for the crop. Morocco’s soft wheat stocks have slipped to a little below a 60-day supply, and this might spark increased buying on the world market soon. Morocco imported 217,000 tonnes in January. March wheat closed 5 cents higher on the session yesterday but near the lows of the session. Weakness in corn and soybeans and ideas that the short-term buying spree from North African and Middle Eastern countries may be near an end for now helped to spark some long liquidation selling. A continued strong export tender wire plus dryness concerns for China and the US southern and western plains helped to support the early strong gains. Iraq bought 350,000 tonnes of wheat, with 200,000 from the US and 150,000 from Australia. This also lent support early. Tunisia bought 100,000 tonnes of soft wheat on Saturday in a tender for 50,000 ,and this was also seen as positive. Weekly export inspections, released during the session yesterday, came in at 24.19 million bushels, which was below trade expectations and below the 30.89 million necessary each week to reach the USDA projection. Cumulative shipments have reached 62.3% of the USDA forecast for the season, compared with the 5-year average of 70.5%. Fears that the winter wheat crop in China will not have enough moisture coming out of dormancy have provided the foundation for the current rally. News from Egypt’s main government wheat buyer that imports are flowing smoothly was seen as a positive force as well, as Egypt is the world’s largest importer. The USDA baseline projections for the 2011/12 season suggest planted acreage at 57 million acres for all wheat, up 3.4 million from last year. There is talk that growers in western Kansas to Western Texas that are experiencing very poor growing conditions might pull out their winter wheat crops and instead plant other crops such as corn or sorghum. Australia cut its wheat harvest for the 2010/11 season slightly but left exports unchanged at 16 million tonnes. This was up from 14.75 million last year.

Bron: CME