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NEAR-TERM MARKET FUNDAMENTALS: Wheat assumed price leadership among the grains yesterday with sharp gains in all contracts. The market was bolstered by fund buying and traders said that this triggered large scale commission house buying on stops as the market shot higher. Cash traders report that export demand remains moderate to light despite recent weakness in the dollar since the rally in wheat futures has largely negated this factor. Weather remains dry in the Lower Plains in the US, and this is expected to last through at least late this week. Export inspections for wheat were 12.6 million bushels this week versus 14.57 last week. This was below trade expectations. Total inspections to-date stand at 82.1% of the projected total for the marketing year compared to a 5-year average of 77.5%. The Ministry of Agriculture in Russia said yesterday that their wheat exports for the 2008/09 marketing year stood at 13.21 million tonnes through March 13th. Japan is seeking 106,000 tonnes of wheat on its regular weekly tender. Syria has completed a wheat tender for 200,000 tonnes according to trade sources. This comes after a long stretch in which Syria has either cancelled or postponed the majority of its tenders. The origin for this wheat was Russia. The sharply higher close in May wheat yesterday was the 9th straight session in which wheat closed in the opposite direction from the previous session.
CASH NEWS AND TENDERS: Japan is seeking 106,000 tonnes of wheat on its regular weekly tender.
WEATHER: The rains of late last week left large sections of western Nebraska, western Kansas and NW Oklahoma almost entirely dry. Below normal rain is expected in the area for at least another 5 days and early next week is uncertain.
TODAY’S GUIDANCE: Wheat has not seen the kind of demand numbers of late that we have seen in corn and soybeans, and wheat has not seen the level of fund buying seen in corn despite the fact that trend-following funds are heavily short in wheat. The rally may have cleared the market temporarily, and there is no sign of stepped up export demand for US wheat. Support is at 528 to 529 in the May contract with added support near 515. Resistance is near 552.
