Source: Kansas Wheat Commission

Market Analysis: New Market High in K.C. Wheat

"Up, up and away" is the theme song for the wheat market during the last 12 days of trading. The driver for the sharp advance summed up in one word; demand. World wheat importing countries became aggressive buyers after the first of the year. Both the quantity of countries and their amounts of wheat purchase are on the rise. We will need to sustain the current pace to advance the price.

For the second week in a row, the weekly export sales report exceeded one million metric tons. Twenty-eight countries purchased wheat, last week. Four of those countries bought over 100,000 metric tons. We should see another strong weekly sales report next week.

During the week, Algeria announced a wheat purchase totaling 800,000 metric tons. This was hard wheat and option origin. In addition, rumors floated on the floor of Saudi Arabia looking to purchase 250,000 metric tons of 12.5 percent protein wheat and 250,000 metric tons of 14 percent protein wheat. The United States is one of a few countries that have the wheat to meet their specifications. A rumor of China continuing to be a buyer of feed wheat from Australia adds another plus for the wheat market.

Weather and unrest is the concerns for the wheat market. The forecast for next week shows some moisture headed into the Plains States starting on Sunday. Although the amounts look light, the idea of moisture will weigh on the wheat price.

The March Kansas City wheat contract gained $1.12 from the low made twelve days ago. In the last two days, the March contract lost thirty-four cents from the high. Unrest in Egypt, the world largest wheat importer, has traders concerned about additional wheat purchases and the shipment of current wheat sales into this region. If the unrest continues and the snow falls in decent amounts, the wheat price is likely to fall next week. Seasonally, the wheat market is due for a break.