Pre-Opening Wheat Market Report 06 January
March wheat was up 6 1/2 cents late in the overnight session. Outside market forces look slightly positive this morning with a weaker tone to the US dollar and light strength in equity and energy markets. Egypt tendered for optional origin wheat after the close yesterday, and the results this morning could be a factor. Argentina is reforming their export procedures to allow grains to flow more freely. They will scrap the incremental quota system, and the government will no longer intervene by granting export permits bit by bit. The European Union granted export licenses for 107,000 tonnes of wheat this week, which pushed season-to-date exports to 7.4 million tonnes, down from last year's pace of 11.2 million tonnes. March wheat closed sharply lower on the session yesterday, following the other grains lower as more and more talk of improving grain weather in Argentina for next week sparked more aggressive selling. March KC wheat closed down 28 cents on the day and is already down as much as 47 3/4 cents from Tuesday's highs. The market was pressured by a strong US dollar with a surge up to the highest level since December 14th. A recovery in the gold market and a firm tone for US equity markets helped to offset some of the dollar strength. Weakness in the other grains helped to drive the market sharply lower on the day and down to the lowest level since December 23rd. Talk of the overbought condition of the market after the recent surge and further talk that winter wheat conditions have improved over the past month helped to pressure the market as well. week.