May wheat was up 6 cents late in the overnight session. Outside market forces look positive today with strong gold and energy markets. With a positive tilt to outside markets and the outlook for stressful conditions for parts of the US winter wheat areas, the market saw solid gains overnight. Wheat appears cheap relative to corn, and this has added to the positive tone. Kansas rains on the weekend came in at 1/4 to 1/2 inch and most of this was in the eastern half of the state. The west remains dry and the outlook appears supportive with a warmer and drier tilt for the region. The US weather news was partially offset by news of rains in dry areas of China, which may help boost growth. May wheat closed 12 3/4 cents higher on the session Friday and managed to close 4 1/4 cents higher on the week, but the close was down 26 cents from the session peak. The market saw strong follow-through buying from Thursday’s recovery bounce to help drive the market sharply higher. Tunisia passed on a tender to buy 50,000 tonnes of milling wheat, which was seen as a negative. Sudan is still tendering for 300,000 tonnes of wheat, and Jordon is in the market for 100,000 tonnes. A further weakening of the US dollar was also seen as a supportive factor, as US wheat looks competitive on the world market. European wheat exports are well ahead of last year and well above trade expectations, and traders see a slowdown as supply tightens as the current pace is unsustainable. The Commitments of Traders reports as of March 15th showed non-commercial traders were net long 25,258 contracts, an increase of 6,126 contracts for the week. Commodity index traders held a net long position of 206,513 contracts, down 7,913 for the week. Traders will monitor the weekly crop condition reports this afternoon.
Bron: CME