US Wheat Review on Thursday: Falls on large supplies, soft demand

 

 

Pressure from large supplies and poor export demand knocked down U.S. wheat futures Thursday.

 

Chicago Board of Trade March wheat ended down 9 1/4 cents at $5.27 3/4 a bushel. Kansas City Board of Trade March wheat fell 9 1/2 cents to $5.27, and Minneapolis Grain Exchange March wheat lost 7 1/4 cents to $5.36 3/4.

 

The markets continued to feel pressure from a bearish increase in the U.S. Department of Agriculture's 2009-10 U.S. carryout estimate, analysts said. The government Tuesday raised its forecast to a 22-year high of 976 million bushels, up from its December estimate of 900 million.

 

The hefty carryout is "something that's going to be a drag on the wheat market," despite USDA's estimate for a 14% decline in U.S. winter wheat seedings from a year earlier, an analyst said. Winter wheat was planted in the fall and will be harvested in early summer.

 

Thursday's losses erased modest gains from Wednesday, when late index fund buying helped boost the markets, traders said. Wheat did not see a similar boost at the close Thursday. Commodity funds sold an estimated 4,000 wheat contracts at the CBOT.

 

The markets appear ready for a bounce following recent sell-offs, said Dale Durchholz, analyst for AgriVisor. Wheat and corn are "in a position to put in short-term price cycle lows at this point," he said.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower on bearishness about ample supplies and sluggish export demand, traders said. Export business has sagged amid competition from foreign countries.

 

Losses in CBOT corn and soy set a bearish tonnee for wheat early on, a trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat slumped with the other markets. Weekly U.S. wheat export sales of 181,900 tonnes were toward the low end of trader expectations.

 

"When supplies are abundant in the world, the U.S. tends to become the export source of last resort," an analyst said. "That's sort of what's going on."