U.S. wheat futures are poised for a strong start to Wednesday's day session, driven by traders covering previously sold positions ahead of key government crop data on acreage and supply and spillover support from corn.
U.S. wheat is expected to open 14 to 16 cents per bushel higher.
In overnight electronic trading, the September Chicago Board of Trade contract rose 16 3/4 cents, or 2.5%, to $6.88 1/2 a bushel.
The market is expected to follow corn's lead, rallying in a correction from recent declines. Solid gains in European wheat futures are seen providing guidance for a market viewed as short-term oversold, a CBOT broker said.
The market is anticipating federal forecasters will confirm a lot of spring wheat acres did not get planted due to excessive moisture in the U.S. spring wheat belt of the northern Plains, the broker added.
The impact from excessive moisture in the northern U.S. plains was evident in U.S. Department of Agriculture's spring wheat condition ratings released Monday. The USDA reported the portion of the crop rated good to excellent fell three percentage points to 69%. The rating fell four percentage points in Minnesota and North Dakota, and six percentage points in South Dakota.
Analysts are projecting that the USDA will estimate spring wheat plantings at 13.32 million acres, down from a March projection of 14.43 million. The expected decline is due mainly to excessive rains and snow melt in the northern U.S. Plains that delayed planting this season. The region, particularly North Dakota, has faced excessively wet conditions.
USDA is scheduled to release its acreage forecast at 8:30 a.m. EDT Thursday (1230 GMT). The government also will release its estimate for U.S. wheat inventories as of June 1.
News of fresh export demand will aid the supportive tone, with private exporters reporting to USDA export sales of 120,000 metric tons of soft red winter wheat for delivery to unknown destinations during the 2011/2012 marketing year.
South Korea's Major Feedmill Group and Busan branch of Korea Feed Association Wednesday bought four cargoes totaling 220,000 metric tons of optional origin feed wheat.
Meanwhile, futures will draw further support from external financial markets. Outside markets are painting a supportive picture for prices, with a lower U.S. dollar and higher crude oil and metal futures attracting buying.
The support of external markets amplified a fundamental recovery overnight in the grain and oilseed markets ahead of Thursday morning's quarterly stocks and planted acreage reports, said Bryce Knorr, analyst with agricultural publication Farm Futures.
Greek lawmakers are being pushed to pass a vote on austerity measures by strong pressure from European leaders, who warned that there were no contingency plans to save Greece from default if it fails to pass these austerity measures, Knorr said.