May wheat was up 7 cents late in the overnight session. Outside market forces look positive. Deliveries against the March contract came in at 305 contracts overnight. The forecast over the short term is a little drier for the western plains, and that coupled with a generally dry trend in the forecast into the middle of April may have helped support the bounce overnight. The weaker US dollar and ideas that US wheat is cheap compared to corn domestically and compared to wheat from other key exporting nations has helped to provide some support to the market. The news of some rains hitting the dry areas of the plains had helped spark an aggressive sell-off over the past few sessions. May wheat closed sharply lower on the session yesterday and saw its lowest close since December 16th. The push lower was led by a negative overall tone to the grain markets, better than expected moisture in the forecast for the central plains and a stronger US dollar. July KC wheat appeared to lead the markets lower, as some moisture for western Kansas was expected to help the hard red winter wheat crop have better conditions next week. Kansas wheat was rated just 25% good to excellent as of March 6th, which was the lowest rating for early March since 2002. Midday reports from some traders that actual precipitation was less than expected for the western parts of the plains helped to provide some support. Sudan issued a tender to buy 300,000 tonnes of wheat from any origin. The USDA confirmed the sale of 300,000 tonnes of US wheat to Iraq. Traders are expecting to see a slight decline of 5-10 million bushels in ending stocks for the Supply/Demand report Thursday morning. This is based on ideas that exports could be adjusted slightly higher. Last month, ending stocks were pegged at 818 million bushels. Pressures are mounting for India to allow some increase in wheat exports, but with concerns over inflation and elections coming up, many traders expect little or no action on the export front. India’s wheat stocks as of March 1st were 17.2 million tonnes compared with a target of 8.2 million. Rice stocks totaled 28.75 million tonnes versus a target of 11.8. Storage may be a bigger issue when new crop wheat moves on the market in the months just ahead. Private analysts in the Ukraine are crediting favorable weather as a reason to expect the 2011 grain harvest to jump 24% to 48.7 million tonnes. Improving conditions for China’s wheat crop has also helped pressure the market in recent days.

Bron: CME