Pre-Opening Wheat Market Report for 5/11/2010

July wheat was 2 1/2 cents lower overnight. The dollar index was substantially higher, fully erasing yesterday’s massive early losses in the dollar. Deliveries against the May wheat contract totaled just 45 contracts with the total for the delivery period so far at 3,648.

After breaking sharply yesterday and closing near the lows for the day, July wheat extended the week’s early losses into the overnight session. Traders said that wheat was particularly hard hit by the big recovery rally in the dollar that started during the day session yesterday.

The USDA’s weekly Crop Progress report showed the US spring wheat crop at 67% planted this week compared to 60% last week and 34% last year. The 10 year average for this time of year is 65%. The weekly Winter Wheat Conditions report showed 66% of the crop rated good/excellent compared to 68% last week and 46% last year. This is the second week in a row that the crop condition has slipped. The 10 year average for this time of year is 48%. The highest percent rated good/excellent was 78% in 1993 while the lowest was 21% in 1989.

This week’s export inspections were out yesterday and they stood at 20.797 million bushels, up from 17.894 million the previous week. Cumulative inspections stand at 91.9% of the USDA’s export projection for 2009/10 versus a 5-year average of 91.1%. Inspections need to average 18.864 million bushels each week to reach the USDA’s projection. The USDA will issue its May supply and demand reports this morning and the first crop production report for the season for US winter wheat crop. Traders are expecting the crop to be down about 90 million bushels below last year’s total of 1.523 billion.