May wheat was down 21 1/2 cents late in the overnight session. Outside market forces look negative. Deliveries against the March contract came in at 16 contracts overnight. May wheat is down as much as $1.30 off of Mondays highs as the Japanese quake news just adds to the aggressive long liquidation selling trend this week. Ideas that some shipments will be slowed and that the world economy may slow a bit helped to drive speculators out of commodity markets in general overnight. A mostly dry forecast for the southern plains for the next 10 days has had little impact so far, as the focus this week has been on slower US exports, a better outlook for China’s crop, expectations for a much larger crop from the Black Sea region for this year and expectations for a record harvest from India. The market has pushed to its lowest level since November 23rd basis the May futures. May closed $1.85 off of the February 9th peak yesterday and added to the losses overnight. The bearish tone from outside markets, negative news from the USDA and concerns that the recent surge in demand could slow helped to drive the market sharply lower on the session yesterday. The USDA ending stocks forecast for 2010/11 came in at 843 million bushels, which was up from 818 million in last month’s report and compares with 976 million for last year. Traders had expected to see a slight revision lower of 5-10 million bushels, so the news was seen as negative. Exports were revised down by 25 million bushels. For the world report, ending stocks for 2010/11 were pegged at 181.90 million tonnes, up from 177.77 million tonnes reported last month and compared with 197.6 million tonnes last year. A drier and warmer forecast for the central and southern plains failed to provide much support. Weekly export sales for wheat came in at 575,700 metric tonnes for the current marketing year and 81,500 for the next marketing year for a total of 657,200. Cumulative sales stand at 91.6% of the USDA forecast for 2010/11 (current) marketing year versus a 5 year average of 88.0%. Sales of 226,000 metric tonnes are needed each week to reach the USDA forecast for the year. Japan bought 135,823 tonnes of wheat at their weekly tender yesterday.

Bron: CME