July wheat was 3/4 of a cent higher overnight. The dollar index was narrowly mixed.

The July wheat contract remains caught between the contract low seen on April 5th and last week’s high at 496 1/2. Traders indicate that wheat is balanced between the positive influence of recent weakness in the dollar, and the negative influence of superb crop conditions in the US. Traders also note that additional support is coming from the near record large net short position held by trend-following funds, and indications that they may have started to cautiously cover some shorts over the past two weeks.

The USDA’s weekly Winter Wheat Crop Conditions report showed 65% of the overall crop rated good-to-excellent compared to 65% last week and 42% last year. The 10 year average for this time of year is 49%. Ohio, the largest soft red winter wheat producing state stands at 72% good-to-excellent.

This week’s export inspections for wheat were 17.1 million bushels, down from last week’s total of 21.2 million bushels. Cumulative inspections stand at 84.0% of the USDA’s projection for the 2009/10 crop marketing year versus a 5-year average of 84.5%. This year’s export pace has moved back down to near the 5-year average after last week’s 40 million bushel increase in the USDA’s export projection for 2009/10. Inspections need to average 17.9 million bushels each week to reach the USDA’s new projection.

Saudi Arabia reports that it bought 550,000 tonnes of wheat on its recent tender with delivery scheduled for the June through October period. This tender was first reported last week, and it is intended to keep Saudi wheat stocks at 2 million tons versus annual domestic usage near 3 million tonnes. The Government of Kazakhstan reports that its grain stocks stand at 12.9 million tonnes which is 4.5 million tonnes above the same date last year. South Korea is said to be considering limited imports of Kazakh wheat. Japan is in the market for 157,000 tonnes of wheat on its regular weekly tender. Romania expects to harvest 6.7 million tonnes of wheat this year, up from 5.2 million last year. Turkey is tendering to sell 110,000 tonnes of various classes of mostly milling wheat along with a small quantity of feed wheat.
Bron:CME