March wheat was down 6 cents overnight. Outside markets look slightly negative. The market turn up sharply yesterday. It gave back a small portion of the gains overnight, but the outside-day higher and strong close yesterday appeared to have caught many traders by surprise. Quality milling wheat is expected to be in tight supply ahead now that nearly half of the Australia wheat may not reach grade. The jump in tenders on the export wire appears to be on the rise this week, with Tunisia tendering to buy 67,000 tonnes of optional origin wheat and Algeria tendering for 50,000 tonnes. Iraq is still in the market for 100,000 tonnes, Bangladesh for 50,000, Libya for 85,000 and Turkey for 300,000 tonnes. The tighter supply from Argentina coupled with ideas that European supply is tight has traders anticipating better US sales over the near term. The market closed sharply higher on the session yesterday after a sharply lower trade earlier in the session. The close was near the highs of a 34 1/4 cent range. Talk of the oversold condition of the market and continued dry weather in the plains helped to support active speculator buying. The sharp rally in the US dollar plus continued fears from grain traders of index fund rebalancing helped to trigger the early break yesterday. The Kansas winter wheat crop is now rated just 27% good to excellent, which is down from 69% last year and the 5-year average of 59%. While the crops appear vulnerable to deteriorating crop conditions from dryness in the plains of the US and in China, traders do not see any damaging cold weather over the near-term. Traders have been expecting a big crop out of India, but recent reports show some problems developing in the region. Better than expected production out of Argentina helped to limit the advance yesterday. Traders see weekly export sales, released before the opening, near 400,000 tonnes.

Bron: CME