March wheat was down 3 1/4 cents late in the overnight session. Outside market forces were a bit positive this morning. Deliveries against the March contract for second notice day came in at 1,248 contracts. Continued talk that the drought-affected area in China is getting smaller and some light concerns over tensions in the Middle East helped to spark overnight weakness. The wheat-growing area affected by the drought in China has fallen by 2/3 since February 8th but it still totals 2.52 million hectares. While China’s crop is improving, the US crop has deteriorated over the past month, and conditions coming out of dormancy are some of the worst in the past 20 years. As of the end of February, the Kansas crop was rated just 25% in good to excellent condition compared with 53% last year. The poor to very poor reading is 40%. In Oklahoma, just 19% is rated good to excellent from 60% last year, with 42% of the crop rated poor to very poor. In Texas, 18% is good to excellent against 46% last year, and 56% of the crop is rated poor to very poor. On top of the poor ratings, traders see little or no rain in the forecast for the next 10 days. However, with an active weather pattern across the US, the eastern plains look to receive rains, and traders do not rule out some in the northern and western plains area. Weekly export inspections, released during the session yesterday, came in at 19.57 million bushels, well below trade expectations and below the 31.6 million-bushel average needed each week to reach the USDA projection. The Canadian Wheat Board forecasted wheat production this year arounf 23.8 million tonnes, up from 23.2 million last year. The Wheat Board expects world production to be near 653.5 million tonnes which is up from 647.5 million last year but well below the International Grain Council’s estimate from last week at 672 million tonnes. Traders indicated that the market may have received some additional support from talk that the Russian crop conditions might not be as favorable as expected due to recent frigid temperatures and less than expected snow cover for some areas. Saudi Arabia bought 275,000 tonnes of wheat with four of the five shipments coming from the US and one from Brazil. Morocco and Iraq are still tendering for 280,000 and 100,000 respectively.

Bron: CME