July wheat was up 1/2 cent late in the overnight session. Strength in the dollar is seen as a short-term negative force.

Weather damage fears from too much cold weather in China more than offset improving crop conditions in the US to support sharply higher trade yesterday. With trend-following fund traders holding a near record net short position, the cold weather scare in China and dryness concerns in the southwestern parts of China helped to support. Cold weather has slowed growth of the wheat in China but traders still see only light reductions in production for China’s winter wheat crop. Between drought and cold weather, traders see damage of only 1-3 million tonnes from a crop of 106 million. Traders will continue to monitor the weather closely in China. Frost damage concerns from China along with the weak currency has helped European milling wheat futures push to the highest level since mid-January.

Even with a range of almost 20 cents, the July contract stayed inside of Monday’s range yesterday but closed near the highs. The lack of significant selling pressure even after continued improvement in crop ratings this week along with more positive influence from outside market forces helped to support.

The winter wheat crop is now rated 69% good to excellent condition which was up from 65% last week and 49% as the 10-year average. Last year, only 43% of the crop was rated good to excellent. The best crop rating for this time of the year was 77% good/excellent in 1993. In that year, July wheat was trading near 315 at this time of the year and posted contract lows on June 17th at 277. The spring wheat crop is now 20% planted as compared with 6% last year and 16% as the 10-year average.

Iraq bought 400,000 tonnes of wheat from Russia, US and Canada.

Traders see their needs for the year near 3.0-3.5 million tonnes and the country has already bought 1.18 million tonnes. India wheat state-run agencies are short on elevator space due to bumper wheat crops and active storage for the past few years and as much as 6.53 million tonnes may be stored on the ground outside. Stocks are currently more than twice the government buffer requirement and the current crop is also a record or near record 82 million tonnes.
Bron:CME