May wheat was up 17 cents late in the overnight session. Outside market forces look positive, with the weaker dollar especially supportive to wheat due to competition for exports. Strength in other commodity markets adds to the positive tone. The tightening supply outlook for hard red winter wheat in the southern plains, continued dryness concerns for Europe and China, and cold and wet weather that could keep spring wheat planting progress slow in the US and Canada helped to support the surge higher overnight. Some areas of the winter wheat belt may show some improving crop prospects, while others may see too much rain in the next week. China’s wheat areas see a little better chance of some rain in the next week, which would help ease dryness concerns. Europe looks mostly dry for the next week, which comes on top of dry conditions for the past few months. July wheat closed at 821 yesterday, which was 1/4 cent above a 50% retracement of the February to March break. Weather issues and weakness in the dollar supported strong gains on the session yesterday, but the highs were put in during the first hour of trade and the market closed well off of those levels. However, a surge overnight took the market well above yesterday’s highs. July KC wheat continued to push higher yesterday after the first hour of trade, closed more than 30 cents higher on the session, and was up more than 18 cents overnight. The upside was limited by the potential for some rains in the winter wheat areas that could improve conditions in some areas. However, a drought-busting shower for southern and western growing areas is still not in the forecast. The weekly conditions report on Monday showed that 38% of the winter wheat crop was rated poor to very poor compared to 36% last week and 6% last year. The 10 year average for this time of year is 20%. News from Russia this week that they will not lift their export ban until at least July has added to the positive tone, but traders see increasing supply ahead “if” the weather is normal. The India Farm Minister indicates that the country should allow exports soon. The forecast for normal monsoons this year, a record new harvest of 84.3 million tonnes expected for 2011 and March 1st stocks of 17.2 million tonnes, up from the government target of 8.2 million, are all reasons for them to allow exports for the first time in four years. Lebanon bought 50,000 of milling wheat. Japan seeks 50,000 tonnes of feedwheat.

Bron: CME