July wheat was 3 cents lower overnight. The dollar index moved to its highest level since April, 2009 overnight. Deliveries against the May wheat contract totaled 211 contracts this morning. Today is the last trading day for May futures.

A series of substantial sell offs in wheat this week have put some traders and analysts in a much more negative mood. This has coincided with a renewal of the rally in the dollar, and concern broader issues such as the debt crisis in Europe and the world’s large, overhanging stocks of wheat. One analyst noted that funds have returned to the sell side on more than one occasion this week despite the fact that trend-following funds still hold the largest net short position in wheat of any agricultural commodity market.

This week’s export sales in wheat were above trade expectations, but for the 5th week in a row, old crop sales were below the weekly average needed to reach the USDA’s current export projection for 2009/10. This week’s net sales for wheat came in at 244,400 tonnes for the current marketing year and 241,100 for next year for a total of 485,500 tonnes. As of May 6th, cumulative wheat sales stand at 94.6% of the USDA forecast for 2009/2010 versus a 5 year average of 95.9%. Old crop sales need to average 343,000 tonnes each week to reach the USDA forecast.

Wet weather is somewhat of a theme in the wheat market with excess moisture in a number of soft red wheat areas as we near the end of the week. Forecasts call for light to moderate rains over much of the soft red belt into this weekend with cells of heavy rains hitting parts of Arkansas, Missouri, Illinois and Indiana. Longer term prospects for more rain in Australia and parts of Asia are also in the news this week following the announced end of the El Nino by Australia’s widely-followed Bureau of Meteorology. This has raised the possibility that the reverse weather patter – a La Nina – will now develop. Forecasters note that this wetter weather phenomenon occurs only about 40% of the time following an El Nino.

Officials in Australia also continue to warn about the possibility of a crop damaging plague of locusts in Southern Australia this year. This problem could emerge in the spring in Australia (fall in the US) if corrective steps such as chemical spraying aren’t taken, according to the official.
Bron:CME