(KANWHEAT)--Currently, the wheat market provides mixed signals for producers and traders. For the short-term, the wheat market is in a bullish position. For the long-term, a negative tone hovers over the market. This week’s rally provides an opportunity for producers to extend forward pricing coverage.
This week, demand was the driving bullish fundamental for the wheat market. The weekly export sales number for wheat totaled 953,000 metric tons. This was twice the average pre-report estimate. There were nineteen countries buying old crop and twelve countries purchasing bushels of new crop wheat. They bought moderate amounts with Nigeria the only country to buy over 100,000 metric tons.
The wheat tender list increased this week. Countries on the list include Japan for both feed wheat and milling quality wheat, Tunisia for 67,000 metric tons of milling wheat, the CCC for a total of 54,000 metric tons for donations, Iraq for 50,000 metric tons and Jordan for 150,000 metric tons. Algeria bought 400,000 metric tons of milling wheat with France the likely source.
On Thursday, rumors circulated by wheat traders indicated China was in the cash market for U. S. wheat. China was on the list of buyers of corn for last week. Traders believed this country would repeat their corn action in the wheat market.
For the long term, the wheat market will have to deal with an increase in the supply of wheat. The USDA estimates foreign wheat production at 645 million metric tons. If achieved, this would be a record amount. The expected 51 million metric ton increase over last year includes a larger wheat production number for Argentina, Australia, Canada, European Union, China and the Former Soviet Union countries.
With the current weather conditions in the Northern Hemisphere, the higher world, wheat production number is achievable. Competition for world wheat business will remain strong.