Pre-Opening Wheat Market Report for 11/5/2010
December wheat was down 3 1/4 cents overnight. Outside market forces are slightly negative this morning. The market remains sensitive to the movements in the US dollar. A weaker dollar could support better exports and also attract increased interest from money managers to hold hard assets. The market is also receiving some support from concerns with dry weather in the western plains. Wheat saw a lack of new interested sellers yesterday due to surging commodity markets in general. A sharp break in the US dollar and an inflationary tone for other commodity markets sparked aggressive buying and short-covering early in the session, as the market quickly recovered all of the losses of the previous three trading sessions. Traders continue to believe that the sharp break in the US dollar combined with a tightening supply of exportable surplus wheat out of Europe should boost demand for US wheat, but traders have been disappointed with recent sluggish sales. Continued talk of dry conditions in the southern and western plains has added to the positive tone of late. While there appear to be increased chances of rains for the plains in the 6-10 day outlook, some traders see the rains hitting too far east to alleviate the dryness. Delta growing areas are seeing some relief from the dryness this week. Weekly export sales for wheat came in at 565,600 metric tonnes for the current marketing year and 44,000 for the next marketing year for a total of 609,600. Cumulative wheat sales stand at 58.8% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 63.7%. Sales of 454,000 metric tonnes are needed each week to reach the USDA forecast. Algeria bought 200,000 tonnes of optional origin milling wheat in their tender for 50,000. Bangladesh is retendering for 50,000 tonnes of wheat.