May wheat was up 2 cents late in the overnight session. Outside market forces looked mostly positive overnight, but the weather appeared to be shifting into a more negative influence. Ideas that the southern plains and even into western Kansas will receive better chances of rain and/or snow in the next few weeks appears to be the key short-term factor pressuring the market. Traders see a lack of tightness for the US or world ending stocks on the horizon as a negative force. Dryness is developing in parts of Europe, but it may take a significant weather event at one of the world’s key producers to spark any concerns over tight supply. The market saw some increased speculative and fund selling to drive the market lower yesterday, but it managed to hold above Tuesday’s lows and the close was well off of the lows of the day. With the potential for rain and snow in the southern plains, the market saw a significant sell-off early in the day. The western sections of the southern plains have been the driest, and the moisture potential helped spark a sharp sell-off in Kansas City wheat that spilled over to the Chicago market. May Kansas City wheat was down more than 20 cents on the day early in the session. The UN Food and Agriculture Organization believes global wheat production for the 2011 season will reach 767 million tonnes, up 3.4% from last year. There is some talk of a drier trend in France and Germany, but the US weather appears to be the primary reason for the selling pressure. Higher trade for the US dollar helped to pressure the market as well. For the weekly export sales report, to be released before the open, traders see wheat sales near 650,000 tonnes. Japan bought 103,125 tonnes of food wheat from the US and Australia at their weekly tender with 69,965 tonnes of the total coming from the US. Jordan is tendering to buy 100,000 tonnes of wheat from any origin. Iraq is tendering to buy 100,000 tonnes of wheat from any origin. Sudan is still tendering for 300,000 tonnes of wheat.

Bron: CME