May wheat was up 2 3/4 cents late in the overnight session. Outside market forces looked mostly positive overnight, but some strength in the US dollar may be an offset to higher gold and energy prices. The market has seen some consolidation in the last three sessions, as some probing of the upside and the downside has been seen, but closes have been between 721-723 basis the May wheat. A dry weather trend for western parts of the winter wheat belt continues to provide underlying support. The forecast is not totally dry, and Kansas crop conditions have improved somewhat over the past week, but the region needs more rain than what is in the forecast. The UN Food and Agriculture Organization believes global wheat production for the 2011 season will reach 767 million tonnes, up 3.4% from last year. May wheat closed slightly higher on the session yesterday and up 17 cents from the lows. The market saw some active selling early in the day, but a somewhat threatening forecast for the winter wheat crop and some increase in export news helped to support. Some talk of a slight improvement in the rain outlook for the central plains on the 6-10 day forecast plus a persistent long liquidation selling trend from speculators helped drive the market lower early. However, the market saw a recovery bounce off of the lows as the other grains also recovered, and traders pointed to improving demand on the setback as a positive force. Private exporters reported to the USDA that 160,000 tonnes of US wheat were sold to Nigeria for delivery during the 2010/11 period. In addition, Jordan bought 50,000 tonnes of wheat from Romania. Kansas winter wheat crop conditions improved by 1% this week to 27% good to excellent, which may have helped pressure the market early yesterday. Texas, Oklahoma and Colorado’s conditions deteriorated in the past week. Japan seeks a total of 103,125 tonnes of food wheat from the US and Australia at their weekly tender. Iraq is tendering to buy 100,000 tonnes of wheat from any origin. Sudan is still tendering for 300,000 tonnes of wheat.

Bron: CME