Pre-Opening Wheat Market Report for 8/31/2010
December wheat was 2 cents lower overnight. Outside markets were mixed to negative. Today is First Notice Day and deliveries against the September futures contract in wheat were 4,413 contracts. After surging to start the first trading day of the week, wheat retreated from its highs yesterday and remained near unchanged overnight. Traders indicate that the market is in relative balance as importers continue their buying programs amid adequate world supplies and relatively abundant US supplies. Weather in the Southern Hemisphere is also considered supportive with dry conditions across much of the Western Australian wheat belt and also in western growing regions in Argentina. Some forecasts call for rains in Western Australia into next week which could improve conditions in about half of the dry areas. Rains in the northern winter grains belt in Russia in recent days and weeks have improved conditions there, but conditions remain very dry in the south. Analysts point out that the more northern areas which need to be planted by mid September are in generally good shape with some time remaining before it is too late to plant in the middle and southern tiers of the winter grains belt. Russia’s agriculture minister reported today that 1 million hectares have been sown to winter grains so far, down from 3.9 million hectares as of September 1st, 2009. The wheat crop harvested as of August 31st stood at 29.9 million tonnes, down from 41.2 million at the same point last year. The total summer grain harvest stands at 43 million tonnes as of August 31st. The ag ministry did not provide a comparison to last year. The US spring wheat crop is 69% harvested versus a 5-year average of 75%. This week’s US export inspections for wheat were 25.5 million bushels, up from 24.6 million last week. Despite the recent surge in exports, the total wheat inspections to date stand at just 19.8% of the USDA’s export forecast for 2010/11 versus a 5-year average of 25.1%. Inspections need to average 24.1 million bushels each week to reach the USDA’s forecast. Libya is in the market for 100,000 tonnes of wheat, 70,000 tonnes of this is for milling purposes and the rest is feed wheat. Japan is tendering for 138,865 tonnes of wheat on its regular weekly tender.