July wheat was down 1 cent late in the overnight session. Outside markets were mixed.

The market has found solid buying support this week from a more positive tilt to outside markets and from some longer-term production concerns. The India crop was not as large as expected and dryness in France and questionable weather in China has traders a bit nervous on counting on another year of bumper wheat crops. The European wheat futures pushed to the highest level since January 12th on dryness concerns in France. Late season very hot weather may have trimmed the India wheat crop with traders talking about a final production near last year’s level of 80.68 million tonnes instead of the 82 million expected just recently.

Kazakhstan will supply 2 million tonnes of grain to South Korea after the presidents of the countries signed agreements this week. July wheat has now rallied as much as 51 1/2 cents off of the April lows. The strong dollar and weakness in outside markets helped spark the early selling pressures yesterday but support held and short-covering emerged to support strong gains and a move to the highest level since March 5th.

Weekly export sales came in at 166,400 metric tonnes for the current marketing year and 298,300 for the next marketing year for a total of 464,700. As of April 15, cumulative wheat sales stand at 92.2% of the USDA forecast for 2009/2010 (current) marketing year versus a 5 year average of 95.2%. Sales of 274,000 metric tonnes are needed each week to reach the USDA forecast.

The International Grain Council believes that world wheat production for the 2010/11 season will drop by 17 million tonnes to 658 million but that ending stocks will still increase because world usage is pegged at 654 million tonnes. For Monday’s Canadian plantings report, traders see all wheat planting just under 24 million acres as compared with 24.46 million acres last year.
Bron:cme