July wheat was 5 3/4 cents higher late in the overnight session. The dollar index was mixed to higher. Deliveries against the May wheat contract dropped to zero today.

Traders indicate that the wheat market again ran out of sellers on the Monday-Tuesday break as has happened on a number of breaks over the past two months. A firming trend overnight in the face of a mixed to higher dollar would seem to support the idea that the wheat market is lacking in sellers according to one analyst.

Yesterday’s Crop Production and supply and demand reports from the USDA were considered negative by traders. The USDA left all-wheat supply and demand numbers unchanged for 2009/10, and that was considered neutral. The USDA also released a Crop Production report for winter wheat, and it pegged this year’s crop at 1.458 billion bushels. This was about 25 million bushels above trade expectations. Ending stocks for 2010/11 came in about 45 million above expectations at 997 million bushels. This was also up from the projected 2009/10 ending stocks total of 950 million bushels. This would put 2010/11 ending stocks at the highest levels since 1987/88, although this year’s stocks were briefly pegged at over 1.0 billion bushels this past winter.

World wheat ending stocks for 2010/11 were bumped up by nearly 5 million tonnes versus the current crop year. This puts world ending stocks at 198.09 million tonnes versus 193.37 million for 2009/10 and 165.06 million tonnes for last year. China’s wheat crop for 2010/11 was lowered to 112.0 million tonnes from 114.5 million in 2009/10. Argentina’s crop was raised by 2.4 million. Canadian production was lowered by 2.0 million tonnes.

Weather is expected to remain wet from the northern Plains through much of the Midwest today and into tomorrow. Dry weather in Western Australia is still dampening the outlook for the 2010 wheat crop there. The Indian government continues to predict a normal monsoon this year with the monsoon’s arrival expected as early as mid-May. India production is expected to reach a record 80.98 million tonnes, according to the farm ministry.
|Bron:CME