March wheat was down 12 3/4 cents late in the overnight session. Outside markets were weak on news of China’s further tightening. The wheat trade has remained volatile in recent weeks, as food security and weather concerns have lent support but ample near-term supply and the possibility that "normal" spring weather will cause wheat stocks to increase for the coming year helped to limit the advances. China is not a significant importer of wheat, but their drought is serious, and major crop losses are possible if soil moisture is not recharged soon. About 1.2 million hectares are still thought to be under severe drought. The longer-term forecast is uncertain, but the region looks dry for the next week or so. The lack of moisture in the forecast for US winter wheat in the southern and western plains is also a significant concern. This has helped provide underlying support as traders forecasted warming temperatures as stressful. India’s wheat plantings reached 29.3 million hectares, down from 28.4 million last year. The market closed moderately higher on the session yesterday, as weather uncertainty persisteds. News from the China Agriculture Ministry that the China drought was likely to continue in the northern winter wheat growing areas lent support. The forecast for central and eastern Kansas and other parts of the winter wheat belt which are not suffering from dryness as much as the west was mixed. Another cold weather forecast was seen as potentially positive, but there is the forecast for snow ahead of the cold weather. Bitter cold weather in the Black Sea region is seen as a potential positive factor, but traders also see sufficient snow cover for crops. Traders predict a big recovery in European crops this year, including the eastern region. Weekly export sales, released before the open yesterday, were higher than expected. The daily sales announcements were also supportive. Turkey has apparently bought 300,000 tonnes of milling wheat. half from the US and half from Kazakhstan. Japan bought 153,858 tonnes of US and Canadian wheat at their weekly tender. In the weekly sales report, old crop sales came in at 599,400 metric tonnes and new crop sales at 126,900 tonnes for a total of 726,300. Sales of 362,000 metric tonnes of old crop are needed each week to reach the USDA forecast for the marketing year. The European Union this week granted export licenses for 356,000 tonnes of soft wheat, which pushed their cumulative total for the 2010/11 season to 13.1 million tonnes, up from 11.3 million last year at this time.

Bron: CME