Pre-Opening Wheat Market Report for 6/30/2010

December wheat was 4 1/4 cents higher overnight. The dollar index was lower.

The December wheat contract followed corn and outside markets lower yesterday, but those losses were erased overnight following a setback in the dollar and a modest recovery in many other commodity and equity markets. Traders note that the ongoing problems with excessive moisture in the Canadian Prairies is providing background support in wheat with more unwelcome rain falling in the region to start the current week. Dry weather across the hard and soft red winter wheat harvest areas is expected to continue this week with farmers reporting good yields in most areas of the hard red winter belt.

Many traders are on the sidelines ahead of this morning’s Planted Acreage and Quarterly Grain Stocks reports from the USDA. They expect spring wheat acreage to be down by just over 150,000 acres from the March Planting Intentions report. The loss of acreage is due to excessive rains during the spring wheat and durum wheat planting seasons in the northern Plains. Wheat stocks as of June 1st are expected to be up nearly 280 million bushels from last year’s total of 657 million.

Australia’s Bureau of Meteorology continues to forecast the development of a La Nina weather phenomenon in the southern Pacific. This tends to raise rainfall totals in some key wheat growing areas in Australia. Sub-surface water temperatures in affected regions of the Pacific are below normal, as is normal with the onset of La Nina. Some areas are registering at 4.0 degrees Celsius below normal. Weather forecasts remain dry through the end of the week in both hard and soft red winter wheat areas. However, the 6-10 day forecast calls for above normal precipitation in the Plains and in the western soft red winter wheat belt.

Feed millers in the Philippines bought 25,000 tonnes of feed wheat on a tender announced yesterday.