US Wheat Review on Tuesday: Stumbles on profit-taking, setback

 

 

U.S. wheat futures finished weaker Tuesday in choppy trading as the markets pulled back from a sharp rally Monday.

 

Chicago Board of Trade March wheat closed down 4 3/4 cents at US$5.33 a bushel. Kansas City Board of Trade March wheat dropped 4 cents to US$5.46 3/4, and Minneapolis Grain Exchange March wheat stumbled 4 3/4 cents to US$5.56 1/4.

 

Profit-taking pressured prices with ideas that gains Monday were overdone, traders said. The global supply and demand storyline for wheat is bearish because export demand for U.S. wheat remains sluggish, they said. Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

Neighboring CBOT corn and soy consolidated a bit and closed slightly firmer, which provided no incentive for wheat to chase them higher, an analyst said. Corn and soy finished stronger Monday but off their highs.

 

"Today, because corn and beans moderated, so did wheat," the analyst said. "It's a bearish market."

 

Traders are waiting for the U.S. Department of Agriculture to issue crop data Jan. 12, including the first estimates on U.S. winter wheat seedings. Acreage devoted to soft red winter wheat, traded at the CBOT, is expected to be down from last year because delayed corn and soy harvests prevented farmers from planting SRW wheat.

 

 

Kansas City Board of Trade

 

Profit-taking weighed on KCBT wheat after Monday's strong rally, traders said. The market continues to keep an eye on the weather amid worries that cold conditions could hurt localized areas of hard red winter wheat in the central and southern U.S. Plains.

 

Dormant wheat needs a blanket of snow to protect it from the cold and some parts of western Kansas and the Oklahoma Panhandle are bare, an analyst said. Most other areas are covered.

 

"You're going to have some subzero temps coming into that area," the analyst said. "One has to assume that isn't good."

 

 

Minneapolis Grain Exchange

 

Traders continue to wait for an expected rebalancing of positions by index funds that should bring more money into grain and soy markets. Anticipation of the buying likely limited losses, traders said.