The May K.C. wheat futures contract closed at $4.68 3/4, up 14 1/2 cents for the week. The Chicago and Minneapolis May futures contracts closed up 8 1/2 cents and up 7 3/4 cents at $4.60 3/4 and $4.97 3/4 respectively. The wheat futures markets made new contract lows in Chicago and K.C. early in the week before catching a bid on the back of forecasts for warmer and drier weather conditions in the U.S. southern plains, a weaker U.S. dollar and speculative funds finally beginning to reel in some of their record short positions. This weeks technical reversal in the wheat markets did little to impress the fundamental traders. They continue to point to ample global supplies, poor U.S. exports and another new crop just four months. Several states released updated winter wheat crop condition reports earlier this week. Some improvement was seen in Kansas, Nebraska and South Dakota but most of the reporting states showed modest declines. This is not at all unusual in the winter months and overall conditions are still well above last years levels in most cases. Weekly wheat exports sales were reported at 344,900 tonnes, near the middle of the range of trade estimates between 250,000 and 450,000 tonnes. Exports are down 17% from last year versus the current USDA estimate for a 9% decline for the full crop year.
Ukraine’s 2016/2017 wheat harvest is expected to drop by about 20% from a year ago to 19.0 to 20.0 million metric tonnes vs. 25.0 MMT last year as dry weather at planting time is expected to take a toll on yields.
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