Chicago Board of Trade (CBOT) March wheat closed at $5.10/bu. Friday, while the May closed at $5.21 and July finished the week at $5.33. All were off more than 3¢ from the previous day. CME Group, CBOT’s parent company, reports that traders feel the higher U.S. dollar value is also adding to the pressure in wheat prices.

USDA released preliminary U.S. acreage numbers last week from its Annual Outlook Conference. The all-wheat area for 2009-2010 was put at 58 million acres, which implies a drop of about 1 million acres in spring wheat vs. last year. Winter wheat area is already estimated to be sharply lower than last year.

Last week's export sales were about in-line to a bit stronger than trade expectations. Net sales for wheat came in at 465,400 metric tons (mt) for the current marketing year and 112,500 for next year for a total of 577,900. As of Feb. 19, cumulative wheat sales remained above the average pace at 88.1% of the USDA forecast for 2008-2009 vs. a five-year average of 85.7%. Sales need to average just 224,000 mt each week to reach the USDA forecast.

The U.S. agricultural attaché in India reports that record and near-record wheat crops over the past two years and a continuing ban on wheat exports have resulted in a major build-up in government grain stocks. Stocks are projected to peak to a near record level of 52 million mt (33 million tons wheat and 19 million tons rice) by June 1. This may result in a relaxation of Indian export restrictions in 2009/2010.

The attaché in Saudi Arabia reports that they have implemented their decision to reduce wheat production by 12.5%/year. Saudi Arabia is expected to import 1.5 million mt of wheat this year to replace reduced domestic production.

The International Grains Council (IGC) estimates that world wheat production will fall to 649 million mt in 2009/2010 versus their last estimate of 650 million. This compares to the USDA estimate of 683 million in 2008/2009, which in turn compares to the IGC estimate of 688 million.

Algeria bought 300,000 mt of soft wheat. Traders report that the origin may be France. It is unlikely to be U.S. Bangladesh is in the market for a total of 170,000 mt on two tenders, the CME Group reports.