Australia forecasts a record wheat crop but cuts export forecast

Market Line December 10, 2010 Wheat futures were lower at Chicago and Kansas City Tuesday but higher at Minneapolis. Traders said a higher dollar and technical factors offered price pressure.

The Australian government’s new forecast raised wheat production down under to a record of nearly 27 million metric tons but also reduced the export forecast by two million tons. Rains continue to degrade wheat quality in eastern Australian.

Allen Motew, meteorologist for the Linn Group at Chicago says around December 20th artic cold could be headed for the U.S. central plains which currently lacks a snow cover.

Motew: “Usually the snows come with these cold blasts. This one may or may not have that and we will watch for that.”

The analysis firm Macquarie has added Iran, Iraq and Syria to a list of countries where dryness may impact wheat production.

On Tuesday Chicago March wheat down 8 ¼ cents at 7-84 ¾. March corn down 6 ¼ cents at 5-61 ¾. Portland soft white wheat by rail only steady to 15 cents higher at mostly 7-08 on limited bids. Club wheat premium mostly 17 cents. Hard red winter 11.5 percent protein down four cents at 8-23.  No Portland DNS bids. Minneapolis December spring wheat futures up 4 ¾ cents at 8-55.

Cattle futures had sharp losses Tuesday. Profit taking and technical selling was cited along with hedge pressure. Lower corn limited feeder losses. February live cattle down 187 at 104-55. January feeders down 127 at 117-22. January Class III milk down a dime at 13-35.

I’m Bob Hoff and that’s Market Line on Northwest Aginfo Net.

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