July wheat was unchanged overnight. The dollar index made another new 15-month high.

The wheat market continued to push into new contract lows on Friday and again overnight on strength in the dollar and weakness in many commodity and equity markets. However, losses in wheat were less extreme than in corn over this stretch. Selling is being tied to continued strength in the dollar after last week’s disappointing economic numbers as well as amply supplies on the world market, although large spec traders are already heavily short in wheat.

India announced that its wheat stocks soared to 35.2 million tonnes as of June 1st according to government sources. This compares to their target level of just 4 million tonnes. Rice stocks were also large at 25.3 million tonnes versus the target of 12.2 million. This comes as monsoon rains are moving into the region. Normal monsoons are expected and this would increase yield over last year when monsoon rains were at the lowest levels in decades.

The Commitments of Traders report for the week ending June 1st showed moderate net selling by funds. Trend-followers were net sellers of 4,654 contracts to increase their big net short position to 67,865 contracts. Index funds were net sellers of 4,538 contracts in wheat.

Hot weather continues to push from the SW and is expected to move up from Texas farther into the central Plains and SW Midwest today. This is triggering moderate to locally heavier rains in Kansas today with somewhat heavier amounts expected in central and especially in eastern Nebraska by tomorrow. This heavy rain system is expected to extend through Iowa, northern Missouri and much of Illinois and Indiana before diminishing somewhat into Ohio. None of this rain is welcome for the late developing winter wheat crop.

Weekly export sales came in at a very disappointing at minus 53,200 metric tonnes for the current marketing year and a more favorable 294,300 for the next marketing year for a total of 241,100. As of May 27th, cumulative new crop wheat sales stand at 12.5% of the USDA forecast for the upcoming 2010/2011 marketing year versus a 5 year average of 14.6%. New crop sales need to average 405,000 tonnes each week to reach the USDA forecast.

Bangladesh is tendering for 100,000 tonnes of wheat to boost its emergency food stocks.
Bron:CME