US Wheat Review on Thursday: Closes mostly lower, near unchanged

 

 

U.S. wheat futures ended near mostly lower and near unchanged Thursday after running into some late selling.

 

Chicago Board of Trade March wheat slipped 3/4 cent to US$6.12 1/2 a bushel. Kansas City Board of Trade March wheat fell 3 3/4 cents to US$6.33 1/4, and Minneapolis Grain Exchange March wheat rose 1/2 cent to US$6.64 1/2.

 

The markets traded both sides during the day session and temporarily found support from gains in CBOT soybeans, a trader said. Wheat pulled back as soybeans stumbled, he said.

 

Demand news for wheat was seen as bearish, with weekly U.S. wheat export sales coming in at a marketing year low of 41,900 tonnes, analysts said. Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, bought 56,000 metric tonnes of wheat from Russia and none from the U.S.

 

Late selling added pressure to the markets, traders said. Positioning is expected Friday ahead of U.S. Department of Agriculture reports due out at 8:30 a.m. EST Monday.

 

U.S. winter wheat plantings for 2009 are expected to drop more than 4% from last year in the USDA's seedings report, with the biggest decline seen in soft red winter wheat acres.

 

"Unless someone has insight into Monday's crop production and acreage numbers, it's hard to say there's much of a fundamental bright spot in the wheat market," said Dave Marshall, an independent commodity broker and marketing advisor.

 

The average of analysts' estimates for SRW wheat acres is 9.381 million acres, down from 11.2 million in 2008, according to a survey of 10 analysts. Weak cash prices and the delayed harvest of soybeans in the Midwest discouraged plantings, they said.

 

There was some chatter about the potential for damage to SRW wheat from cold weather next week. The market may have built in some risk premium as there is a lack of snow cover to protect the crop in certain areas, Marshall said.

 

 

Kansas City Board of Trade

 

KCBT wheat ended lower after "trying to run up with the beans" earlier in the session, a floor trader said. There was light market-on-close selling, he said.

 

The demand outlook looks weak, as U.S. wheat is priced too high, a KCBT trader said. Saudi Arabia has reportedly tendered for high-quality wheat and might buy from Canada or Australia, traders said.

 

"We're still priced way over other world values... so unless they're looking for something specific, it's going to tough for us to move some wheat," a trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended mixed and near unchanged. May wheat slipped 1 cent and July wheat rose 3/4 cent.

 

Traders said they are looking ahead to Monday's USDA reports and waiting to see data on plantings and quarterly stocks. The average of analysts' estimates for wheat stocks as of Dec. 1 is 1.365 billion bushels, compared with 1.132 billion a year earlier.

 

"The markets in general are kind of waiting for Monday," a trader said. "Certainly it's going to be a good measure when you're looking at stocks as to what kind of demand is really going on."