Pre-Opening Wheat Market Report for 6/25/2010

December wheat was 1/2 cent lower overnight. The dollar index was higher.

December wheat remained in this week’s narrow trading range yesterday and again overnight. Traders indicate that pressure from the advancing harvest and favorable hard red winter wheat yields in the US is being balanced by the expected downturn in Canadian production along with quality concerns for US soft red winter wheat and markedly improved demand on the export market in recent weeks.

The US hard red winter wheat harvest is coming to an end in Oklahoma and it could be close to wrapping up in parts of Kansas by the end of next week. E

xport sales for wheat were strong again yesterday at 720,600 tonnes. This was well above the high end of trade expectations, and it marks the second week in a row of surprisingly strong US wheat sales. The biggest sale on the report was for 244,500 tonnes to an unknown destination. Sales need to average 374,000 tonnes each week to reach the USDA forecast.

The International Grains Council raised its 2010/11 world wheat crop by 4 million tonnes to 664 million despite an expected downturn in Canadian production. They expect usage to increase by 4 million tonnes to stepped up feed wheat usage. Drier harvest weather is expected in many harvest areas into next week with the exception of scattered and mostly light showers in the Midwest this weekend.

Traders report that an Israeli firm bought about 60,000 of Black Sea origin feed wheat. Tunisia bought 50,000 tonnes of wheat from a previously announced tender. This continues the recent trend toward stepped up demand for wheat from the Middle East and North Africa.