May wheat was up 7 cents late in the overnight session. Outside market forces look bearish today, as China’s rate hike is likelty to put pressure many commodity markets. A strong US dollar and weak equity markets are also seen as negative forces. A combination of a poor start to the winter wheat crop and a dry forecast for the next 10 days for Kansas and Oklahoma helped support solid gains over the past few sessions and again overnight. The first weekly winter wheat conditions report of the season showed that 37% of the crop was rated in good/excellent condition, compared to 65% last year and 52% as the 10-year average. The lowest rating in recent years was 31% in 2002. In that year, the average yield for all wheat ended up at 35 bu/acre versus 46.4 blast year. Crop conditions were actually worse in 1996 when only 27% was reported good to excellent, but that year the first report of the season was not until April 7th. The warm and mostly dry forecast for the southern and western sections of the winter wheat belt helped drive the market sharply higher yesterday, as traders saw further heat episodes coming to the southern plains. Areas of West Kansas, western Oklahoma and Texas saw temperatures of 95-102 degrees over the past the weekend, and this is thought to have stressed crop conditions. Childress, Texas hit a high of 102. July wheat pushed to its highest level since March 8th, up $1.35 in just 14 trading sessions. European milling wheat futures jumped 2.6% yesterday and were up as much as 4% overnight. US weather uncertainties plus dryness issues in Europe are lending support. European wheat areas received some rain over the weekend, but the forecast is dry this week. Wheat areas in China also look dry for the next week. Weekly export inspections, released during the session yesterday, came in 29.47 million bushels, which was above trade expectations but down slightly from 29.7 million last week. Weekly exports need to average 31.35 million bushels to reach the USDA forecast for the marketing year. Cumulative shipments have reached 78.2% of the USDA forecast for the season, compared with the 5-year average of 82.6%.

Bron: CME