Pre-Opening Wheat Market Report for 3/30/2010

May wheat was 4 1/2 cents higher overnight. The dollar index was lower.

The dollar provided support to wheat overnight according to traders, while favorable weather continues to keep a lid on advances. The two contrasting factors have kept the May contract in a narrow range over the past three days despite the fact that the May contract has made new contract lows for four consecutive days. Crop conditions remain better than last year in most winter wheat areas, although we only have official survey data for hard red growing areas of the central and southern Plains. In Kansas, 70% of the winter wheat crop is rated in good to excellent condition. This is up substantially from 63% last week and 42% last year. Oklahoma is rated 69% good to excellent with no comparisons available for last week or last year. Texas is rated at 62% good to excellent. The USDA will start releasing a full set of state-by-state reports with comparisons next Monday. This week’s export inspections in wheat were 14.776 million bushels, down from just over 20 million last week. Cumulative inspections stand at 83.4% of the USDA’s export projection for 2009/10 versus a 5-year average of 81.3%. Inspections need to average 14.087 million each week to reach the USDA’s projection. Weather forecasts call for dry conditions in virtually all winter wheat growing areas into Thursday with rains starting in the northern Plains on Thursday and spreading across the central and southern Plains into Friday. Amounts are expected to be light to moderate in the Plains, but much heavier on Friday and into Saturday in a band running from Arkansas to Minnesota. Japan’s Ministry of Agriculture reports that it will increase food wheat imports by 3% in the year ending March 2011 to 4.96 million tonnes. Japan ranks as the 4th largest wheat importer in the world. It buys on a regular schedule of weekly tenders with supplies coming from the US, Australia and Canada. Bangladesh is tendering for 100,000 tonnes of wheat from optional origins. Egypt is expected to boost wheat imports from 9.5 million tonnes in 2009/10 to 10 million in 2010/11 despite a boost in production according to the US agricultural attache. The attache in Morocco estimates that 2009/10 wheat planting are down 5% in that country due to adverse planting weather.