US Wheat Review on Monday: Extends gains, ends near session highs  

U.S. wheat futures closed near session highs Monday amid fund buying and spreading, as the markets looked ahead to U.S. Department of Agriculture reports due out Tuesday, traders said.

 

Chicago Board of Trade March wheat ended up 4 cents at US$5.72 1/2 a bushel, near its session high of US$5.75. Kansas City Board of Trade March wheat rose 6 cents to US$5.66, and Minneapolis Grain Exchange March wheat rose 1 1/4 cents to US$5.76 1/4.

 

The markets extended gains from Friday, when late buying thought to be tied to index funds shoved prices higher. Funds didn't have the same impact Monday but remained in the markets, a CBOT floor trader said.

 

Activity was volatile in the grains ahead of the close, traders said. Wheat finished higher amid some inter-market spreading, while neighboring CBOT corn and soy ended down, a trader said. Commodity funds bought an estimated 3,000 wheat contracts.

 

The U.S. Department of Agriculture at 8:30 a.m. EST Tuesday is due to issue key crop data, including its first estimates on U.S. winter wheat plantings. The average of analysts' estimates for 2010 winter wheat seedings is 40.916 million acres, down from 43.311 million a year earlier, according to a Dow Jones Newswires survey.

 

A lower-than-expected planting estimate Tuesday would help explain wheat's strength Monday, said Vic Lespinasse, analyst for grainanalyst.com. He said he was taking a "long-shot guess" that plantings would drop more than predicted following the day's gains. Acreage is expected to be down from a year ago due to planting delays and weak prices.

 

"If it turns out that way, I'll be right but I'll also be surprised," Lespinasse said.

 

 

Kansas City Board of Trade

 

KCBT March wheat finished near its electronic session high of US$5.66 1/4.

 

Technical buying and weakness in the U.S. dollar helped support the market, a trader said. Traders were waiting for USDA to issue data Tuesday on U.S. wheat plantings, carryout and ending stocks.

 

The wheat markets will likely focus on the plantings data, traders said. There was some positioning ahead of the reports, they said.

 

 

Minneapolis Grain Exchange

 

MGE March wheat finished near its session high of US$5.80 1/4.

 

U.S. wheat carryout for 2009-10 is estimated at 905 million bushels, up from the USDA's December estimate of 900 million, according to a Dow Jones survey. Analysts said carryout, or what's left over after supply and demand are accounted for, should rise because of weak export demand.