May wheat was down 11 cents late in the overnight session. Outside market forces looked negative with weakness in metal markets and equity markets overnight offset by a slightly negative tone for the US dollar. Weakness in outside markets helped drive May wheat down as much as 23 1/4 cents overnight before it made a recovery bounce. Selling pressure from outside market forces plus some talk of rain possibilities for the southwestern plains into the weekend helped drive the market lower. The weekly winter wheat crop conditions report, released after the close, showed that just 36% of the crop was rated good/excellent compared to 37% last week and 65% last year. The 10 year average for this time of year is 50%. The lowest percent rated good/excellent was 27% in 1996. Kansas was rated 28% good to excellent, down from 69% last year, while Oklahoma was just 11% versus 71% last year. Their worst ever was 10% in 1996. Some forecasts call for rains for this weekend in the dry areas from western parts of Kansas down through Texas, while others see most or all of the rain coming to the eastern sections of these states. This event looks critical to crop conditions. Very hot weather thas past weekend in the southern plains was thought to have stressed the crop. Traders were looking for deteriorating crop conditions for the weekly update, so the 1% drop may have been somewhat disappointing to the bulls. Dryness in northern China and Western Europe and extremely wet conditions in the Canadian prairies are seen as hotspots for wheat, and traders are beginning to monitor the weather closely. July wheat closed near unchanged on the session yesterday, near the middle of a 23 cent trading range, as traders saw a late rally in corn offsetting weakness in Kansas City wheat and soybeans. The market pushed to the highest level since March 7th, but some traders saw better chances of rain for the southern and western plains. This helped spark sharply lower trade for Kansas City wheat, which helped pressure Chicago wheat as well. Strength in corn and ideas that soft red wheat will see increasing feed usage for southeastern pork and poultry operators helped to provide some support. Weekly export inspections, released during the session yesterday, came in at 28.279 million bushels, which was about as expected. In order to reach the USDA projection for the 2010/11 season, weekly inspections need to average 31.7 million bushels.

Bron: CME