U.S. wheat futures open week lower

by Ron Sterk
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KANSAS CITY — Marginal rainfall across the parched hard red winter wheat region and mixed demand signals left U.S. wheat futures slightly lower at the open and narrowly mixed at 10:00 a.m. Central Time as the new week began.

Southern Plains weather was a focus after much-needed, albeit light, rainfall was recorded in some areas over the weekend, but temperatures in the 70s with some record highs were expected from Texas through much of Kansas today followed by freezing weather again in some areas at midweek. The lack of snow cover across the region leaves dormant plants susceptible to winter kill from freezing temperatures and from freeze-thaw changes.

Meteorologists forecast mostly dry conditions across the southern Plains over the next 7 to 10 days, with temperatures above average for the period.

Ongoing drought across most of the hard red winter wheat belt remains a major concern for the 2013 crop with condition ratings at or near record lows, although spring rainfall remains the key determinant of yield and production for winter wheat.

In contrast, rain was in the forecast for much of the soft red winter wheat region of the Central states, which already was in much better shape moisture-wise compared with a year earlier.

Wheat export demand, meanwhile, was a mixed bag. Net sales of U.S wheat for the week ended Jan. 17 reported by the U.S. Department of Agriculture last Friday were 572,500 tonnes for delivery in 2012-13, above trade expectations that ranged from 300,000 to 500,000 tonnes.

And the U.S.D.A. this morning said U.S. wheat inspected for export during the week ended Jan. 24 was 22,283,000 bus (about 606,505 tonnes), above the high end of trade expectations that ranged from 13 million to 21 million bus.

But prospects for new sales of U.S. wheat remained limited, in part due to the fact the world’s largest wheat buyer, Egypt, has been mostly out of the market due to internal economic issues.

Wheat and flour prices in Russia were expected to be record high after that country said domestic wheat stocks were down 40% from a year earlier. At the same time, Ukraine July 1, 2012-Jan. 25, 2013, wheat exports were up 46% from the same period the prior year.

And the Canadian Wheat Board said high wheat prices were expected to boost wheat seedings in Canada by 5% to 10% this spring.
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