December wheat was up 8 1/2 cents overnight. Outside market forces are positive. With a weaker dollar and the outlook for a tighter supply of exportable wheat supply out of Europe in the next several months, traders are hoping to see better US exports ahead. Dry weather in the forecast for the southern Midwest and northern delta and a dry outlook for western plains growing areas has traders nervous over the possibility of crop problems in the spring if the crop does not get off to a good start ahead of dormancy. Traders expected to see an improving winter wheat crop this week but the weekly update showed crops rated in good to excellent condition at just 46% as compared to 47% last week and 64% last year. The lowest rated crop in the past 24 years prior to this year was 48% in 2001. The winter wheat crop plantings have reached 92% complete compared to 88% last week and 81% last year. The 10 year average for this time of year is 89%. Once the support from outside market forces fizzled yesterday, selling from speculators helped drive December wheat from the highest level since October 11th to close sharply lower and near the low end of a 27 cent range. Outside market forces were positive early and the dry forecast for the US winter wheat regions helped to add to the positive tone. Traders indicated some profit-taking from speculators sparked the selling pressure which pushed the market from sharply higher to lower on the day. The US dollar also saw a move from lower to higher on the day which helped pressure. July wheat pushed to within two cents of the August peak, led by continued dryness concerns, but it closed sharply lower on the day. December wheat, on the other hand, was up to the highest level since October 11th but the highs were still $1.40 per bushel short of the August peak. Traders believe that US export sales will pick up steam soon as Europe begins to run tight on exportable surplus. Weekly export inspections came in at just 16.19 million bushels as compared with trade expectations closer to last week’s exports of 23.6 million. Cumulative shipments have reached 37.6% of the USDA projection for the year as compared with the 5-year average of 45.5% shipped for this time of the year. After the close, Egypt tendered to buy 55,000-60,000 tonnes of wheat, and the results could be seen this morning. Iraq is also in the market for 100,000 tonnes of wheat. Too much rain is slowing the harvest in Australia.

Bron: CME