December wheat was up 4 1/4 cents late in the overnight session. Outside market factors look positive today with a weaker US dollar and strength in equity markets. The overnight rally pushed the market to its highest level since June 14th, as talk that lower corn production would force increased wheat feeding this year lent support. The weaker US dollar is also seen as supportive, but export news has been a bit negative, as a surge in Black Sea exports this year will force other key world exporters to export less. Improving weather in Australia and Argentina are seen as negative supply forces. Spillover buying support from higher grain prices and talk that even Russia’s selling prices are at least seeing higher and higher prices lent support. European milling wheat futures jumped 1.9% overnight. After choppy and lower trade early on Friday, fund buyers turned active in a wide spectrum of commodity markets, and wheat was no exception. The market followed other grain and commodity markets lower early in the session on fears of a long liquidation selling trend for commodities, but outside forces turned up to support. Kansas City wheat found support early from talk that the advancing La Nina condition could keep the plains drought intact with a two-week outlook of hot weather for the southern plains helping to support. There are some rains for winter wheat areas in the forecast for the next ten days, which might support better planting conditions in some areas. Strength in other grains and a surge higher in Minneapolis wheat helped drive the market to new highs for the move. Algeria bought 300,000 tonnes of durum wheat. December Minneapolis wheat is up nearly 50 cents from Thursday’s lows to Friday’s highs. Morocco is tendering for up to 300,000 tonnes of US hard wheat, and Jordon is in the market for 20,000 tonnes. Bangladesh is tendering for 50,000 tonnes of wheat, and South Korea is tendering to buy 53,170 tonnes of US wheat. The Commitments of Traders reports as of August 23rd showed non-commercial traders were net short 17,298 contracts, a decrease of 6,026 contracts for the week. The short-covering trend is seen as positive. Non-Commercial and nonreportable traders combined held a net short position of 39,745 contracts, a decrease of 5,460. Commodity Index traders held a net long position of 205,196 contracts, up 2,163.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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