US Wheat Review on Tuesday: Sags on technical selling, ample supplies

 

 

U.S. wheat futures fell to three-month lows Tuesday on technical selling and continued pressure from large supplies.

 

Chicago Board of Trade March wheat ended down 9 1/2 cents at US$5.00 1/2 a bushel. Kansas City Board of Trade March wheat lost 7 cents to US$5.05, and Minneapolis Grain Exchange March wheat sank 7 cents to US$5.13 1/2.

 

The markets extended losses from last week, when CBOT March wheat closed down 58 1/2 cents on the week. The nearby contract on Tuesday settled at the psychological support level of US$5 after hitting a session low US$4.96, its lowest price since Oct. 12. Commodity funds sold an estimated 4,000 wheat contracts at CBOT.

 

There continues to be bearishness about ample U.S. supplies after the U.S. Department of Agriculture raised its carryout estimate in crop reports issued last Tuesday, said Larry Glenn, broker and analyst at Frontier Ag. There was a lack of surprising supply-and-demand news Tuesday.

 

"The trend just seems to be down," Glenn said. "Traders still have their ideas focused on the reports last Tuesday. They just can't get past those reports."

 

The government last week raised its U.S. carryout forecast to a 22-year high of 976 million bushels, up from its December estimate of 900 million. It cut its projection for U.S. wheat exports due to competition from foreign countries.

 

 

Kansas City Board of Trade

 

KCBT March wheat in electronic trading hit a session low of US$5.01 1/2, its lowest price since Oct. 12. Bearishness about hefty ending stocks and weak demand are overshadowing a steep decline in U.S. winter wheat acres, traders said.

 

It will likely be difficult for the markets to bounce because they seem to be in a "sell-the-rally" attitude, Glenn said. Still, they may try to recover a bit Wednesday in a turnaround, he said.

 

 

Minneapolis Grain Exchange

 

MGE March wheat hit a session low of US$5.10 1/2, its lowest price since Oct. 7.

 

Traders are looking for the drop in wheat prices to uncover new export demand. U.S. wheat has been too expensive to compete for business on the global market.