Why is the wheat being pressured and why is this pull back different from any other pull back that we have had in the recent few weeks?

Technical Weakness -- The extreme volatility in the wheat market has been due for a breather for quite a while. The signs of near term weakness in the market have been present with recent failed attempts to make new highs. Yesterday the December and March Chicago wheat futures closed below a major uptrending line indicating that we could be ripe for a healthy pull back.

End of Month Profit Taking-- It is October 31st, fund managers like to close the month with strong realized profits. Since the market momentum has been showing signs of weakness, the market has experienced some liquidation and profit taking. The weakness continued on into the close today.

Rollover--December contracts are starting to rollover to further out contracts pressuring the market. Keep a close on the December/March and December/July spreads. We will likely see some narrowing of the spread to continue,

Wheat export market continues to be stagnant.--From watching the weekly export numbers, it is hard to believe that the cumulative sales bookings are down 18% from year-ago levels as of last Thursday's report. According to several reports that I have recently read, only 3 of the 6 major wheat export countries are viewed as having enough wheat to be actively selling their wheat on the world market. The Ukraine, Argentina, and Australia have had major weather problems drawing attention to their limited supply issues. As a result of this fundamental information, it is difficult to agressively sell the March and May wheat for fear of supply problems prior to our next harvest. This will likely keep a premium in the market through the spring.

Good harvest weather for beans and corn are pressuring grains in general as more supply is becoming available to the marketplace. The near term supply is healthy, but the longer term demand/supply situation is what has excited the market and will likely continue to keep the price premium in the market for a while to come. As far as next year's hard red winter wheat crop, the weekly crop progress report is indicating that it is 60% rated good to excellent.