March wheat was 5 cents higher overnight. The dollar started on a positive note overnight but turned lower into this morning. Deliveries against the December wheat contract totaled 78 contracts. A generally firm tone in commodity markets was credited with boosting wheat prices overnight. This follows negative price action on Friday that followed the release of a Supply and Demand report from the USDA that was generally viewed as negative. Traders noted that the latest Commitments of Traders report indicates that spec funds were heavy buyers in wheat during the week that the March contract surged from near 690 to near 800. Trend-following (managed) funds were net buyers of 30,339 contracts in the week ending December 7th to decrease their big net short position to just 15,707 contracts. Index funds were net buyers of 3,392 contracts in wheat. Non-Commercial and Non-reportable combined traders held a net short position of 12,968 contracts. This represents a decrease of 36,235 contracts in their net short position. The USDA’s Supply and Demand report raised all-wheat ending stocks to 858 million bushels on Friday, from 848 million in November. Traders had been looking for a drop of about 10 million bushels. The USDA left usage numbers unchanged for 2010/11 with the exception of food use which was lowered by 10 million bushels. Soft red ending stocks were raised 5 million to 188 million bushels, continuing a recent trend that has been bolstered by relatively weak sales of the lower protein soft red wheat throughout the marketing year. Hard red winter stocks were raised 15 million to 338 million bushels. World production, beginning stocks and ending stocks were also raised for 2010/11. The increase for 2010/11 came in large part from a 1.5 million tonne increase in Australia, a 1.3 million tonne increase in Pakistan and a near 1 million tonne increase in Canada. Brazil was increased by 350,000 tonnes. World feed usage was raised by 1.73 million tonnes, in part due to expectations of increased feed wheat supplies from Australia after recent rains there have damaged crop quality in the SE. The USDA pegged world ending stocks at 176.72 million tonnes, up from 172.51 million in November. European traders reported on Friday that Bangladesh is tendering for 100,000 tonnes of wheat and rice. Iraq is also reportedly in the market for 100,000 tonnes of wheat and 30,000 tonnes of rice. Tunisia bought 75,000 tonnes of wheat on a tender for 67,000 tonnes.

Bron: CME