March wheat was up 2 3/4 cents late in the overnight session. Outside markets are mostly negative. The market saw a bounce overnight on news of new export tenders to Egypt and Tunisia. Traders see snow cover in Russia as a reason to suspect that cold weather will not damage crops, but cold weather in Ukraine could still be a winterkill threat. After the close yesterday, Egypt tendered for hard and soft wheat from various locations, including the US. Tunisia is tendering for 50,000 tonnes of soft milling wheat. The snow that fell this week in the US winter wheat belt is likely to melt with the much warmer temperature forecast for the next few days, but colder and drier weather looks to return next week, and the lack of moisture could be seen as a plus for the wheat bulls. China’s growing areas look mostly dry over the next week but not cold enough to do damage. Traders remain concerned that if the drought in China’s wheat areas continue for several more weeks the crop could be significantly lower than expected. India’s wheat stocks for February 1st were pegged at 19.4 million tonnes, which was much higher than the government target of 8.2 million tonnes. Rice stocks were reported at 27.8 million tonnes versus a target of 11.8 million. March wheat fell by 8 cents in the last half hour of trade yesterday to close near the lows of the day, down 23 1/4 cents on the session. Slower than expected export sales, a strong US dollar and talk of some moisture for China and US winter wheat areas this week helped spark the early weakness. A rally in corn futures and a strong recovery for many other commodity markets helped support a bounce into the mid-session, but sellers turned active late. Weekly export sales came in at 391,300 metric tonnes for the current marketing year and 116,000 for the next marketing year for a total of 507,300. This was below expectations. The report indicated that as of February 3rd, cumulative wheat sales stood at 82.1% of the USDA forecast for 2010/11 (current) marketing year versus a 5 year average of 82.9% for this time of year. Old crop sales of 376,000 metric tonnes are needed each week to reach the USDA forecast. The EU this week granted export licenses for 128,000 tonnes of soft wheat. This was the third lowest weekly total of the marketing year. However, cumulative exports have reached 12.8 million tonnes, compared to 10.7 million for the same date last season. Vietnamese exporters plan to stockpile 1 million tonnes of rice during the March 1st to April 15th time frame to prevent prices from falling during harvest.

Bron: CME