US Wheat Review on Friday: Follows corn, soy into positive territory

 

 

Spillover buying from climbing Chicago Board of Trade corn and soybean futures kicked U.S. wheat futures higher Friday, but the markets were unable to recover fully from sharp losses Monday.

 

CBOT March wheat finished up 9 1/2 cents at US$5.78 1/4 per bushel, down 51 1/4 cents on the week. Kansas City Board of Trade March wheat gained 14 1/2 cents to close at US$6.09, and Minneapolis Grain Exchange March wheat rose 11 cents to US$6.52 3/4.

 

Wheat is a follower of the neighboring markets and felt borrowed strength from their gains, traders said. Corn soared on short-covering and unwinding of corn-soybean spreads, while soybeans closed higher on strong demand and concerns about drought in Argentina.

 

CBOT March wheat pared gains after hitting a session high of US$5.85. KCBT and MGE wheat finished nearer session highs.

 

Traders continue to monitor export demand. A sharp drop in prices Monday helped make U.S. wheat more attractive on the world market, although there is still stiff competition for business from other countries, analysts said.

 

"We dropped down the prices," said John Kleist, broker/analyst for Allendale. "That put us in the ballpark but not necessarily up to bat. It's still highly competitive. Even at our lower prices, we're not doing a significant enough portion to consider ourselves at bat."

 

CBOT March wheat continues to hold above major support levels, including the 45-day moving average around US$5.58, Kleist said. The contract would have to close below that level for a day or several days to indicate the market was headed for a new leg down, he said.

 

 

Kansas City Board of Trade

 

KCBT wheat led the upside, with traders looking toward the gains in CBOT corn and soybeans, traders said. There was some positioning ahead of the three-day weekend, they said. The CBOT, KCBT and MGE are closed Monday for the Martin Luther King Jr. holiday.

 

KCBT March wheat closed near its open outcry session high of US$6.10 1/2. The contract closed down 42 cents on the week.

 

Fears about potential damage to the U.S. winter wheat crop from cold weather in the Midwest and Plains have lessened, traders said. Snow cover is expected to insulate the crop from winterkill, which can reduce yields, they said.

 

"It is not a major concern as of yet," Kleist said.

 

 

Minneapolis Grain Exchange

 

MGE wheat continued to gain on CBOT wheat, as it has all week. March wheat finished down 27 1/2 cents on the week.

 

Grain movement has stalled in the upper Midwest owing to the cold weather, a trader said. Temperatures are supposed to moderate this weekend, according to forecasters.