May wheat was up 13 cents late in the overnight session. Outside market forces looked slightly positive with higher gold and a firm tone to agricultural markets. The higher than normal temperatures in the southern plains and a dry outlook for western Kansas, western Oklahoma and Texas in the next few weeks continues to provide underlying support to the wheat market. Cool and wet weather in the northern plains is also a concern. Kansas City July wheat led the wheat market higher overnight. Traders see the surge higher in corn prices as a reason to suspect increased demand for wheat for feed, and this has helped pull up values. May wheat closed lower on the session Friday but 26 1/4 cents higher for the week. The early move to limit-up for corn helped spark a short period of aggressive buying , which drove July wheat to its highest level since March 9th, but the market quickly retreated to trade moderately lower on the day into the mid-session. Ideas that wheat may need to keep up with corn to avoid losing acres in the northern plains plus winter wheat crop concerns due to a more threatening (hot and dry) forecast into this week lent support. Traders seem hesitant to believe that producers will be able to plant the extra spring wheat noted in last week’s plantings report, especially if the forecast for cold and wet weather persists into mid-April in the northern plains. Traders are also getting increasingly concerned about the poor crop conditions for the US and Chinese crops, particularly if their growing regions do not receive better rain coverage soon. China’s growing areas received some rains late last week, but more is needed and the forecast is relatively dry. Some rain in the forecast for parts of Western Europe helped to pressure milling wheat futures Friday, and traders saw a large crop out of India as a negative factor. European rains over the weekend were also seen as beneficial. In addition, exportable supply from Australia is seen as competition for US wheat on the world market. The USDA attache in Australia sees the 2011/12 crop as unchanged from this year and near a record high of 25.5 million tonnes. The Commitments of Traders reports as of March 29th showed non-commercial traders were net long 14,202 contracts, an increase of 1,157 contracts for the week. Commodity index traders held a net long position of 215,278 contracts, up 5,735 for the week. The buying trend from fund traders is seen as a positive short-term force for wheat.

Bron: CME