Wheat Comment 11-25-09

Wheat Morning Update & Commentary Dollar weakness this morning has commodities on edge across the board. Wheat retraced almost 50% of yesterday's 20+ cent lower move during the night session. This type of volatility needs to be approached with caution, especially with the Thanksgiving holiday thinning the ranks of traders. Wheat remains strong technically and could be poised for a run at $6.00. Index funds need 6.30 just to break even on the re-balancing effort done last year. Naturally this run up in price and increase in shipping costs have left the U.S uncompetitive to North African and Middle East destinations. Weakness in the KC HRW market prompted Iraq to book 100,000 tons of HRW wheat. Ports at the Gulf and PNW remain chalked full of grain. Basis remains steady to weak across the country. Other nations, notably Australia have the similar issues. Japan Ag Ministry announced it bought 106,000 mt of Wheat under its regular tender rules Wednesday. They bought 21,000 mt of Canadian red spring & the balance of US white, red, & northern spring. Egypt's GASC announced yesterday it was seeking option origin wheat for delivery between Jan 5-20, results are expected later today. Analyst with Rosario exchange estimates 2.5 mln mt of Wheat have been approved for export by Argentina's gov't since late this summer, with 1.0 mln mt from new crop stockpiles, and the balance from old 2008 crop stockpiles. Overnight markets experienced normal to slightly ...