US Wheat Review on Wednesday: Ends slightly down, pares losses late
Short-covering helped U.S. wheat futures pare losses late Wednesday after earlier trading saw prices fall to their lowest point in more than three months.
Chicago Board of Trade March wheat dropped 3 cents, or 0.6%, to US$4.97 1/2 a bushel. Kansas City Board of Trade March wheat dropped 1/2 cent, or 0.1%, to US$5.04 1/2. Minneapolis Grain Exchange March wheat lost 2 3/4 cents, or 0.5%, to US$5.10 3/4.
CBOT March wheat trimmed losses after hitting a session low of US$4.85 1/4, its lowest price since Oct. 9. The contract settled below US$5 for the first time since Oct. 9 but ended near its session high of US$5.01 1/2.
Prior to the bounce, the markets were pressured from technical selling and a rising U.S. dollar, which makes U.S. wheat less attractive to foreign buyers, a CBOT floor analyst said. The dollar jumped on ideas China, a major buyer of commodities, may slow economic growth.
The supply-and-demand storyline remains bearish for U.S. wheat because ending stocks are large and there is stiff competition for export business, traders said. Increased ending-stocks estimates issued last week by the U.S. Department of Agriculture are "reverberating" in the markets, the floor analyst said.
Commodity funds sold an estimated 4,000 wheat contracts at CBOT.
Kansas City Board of Trade
KCBT March wheat bounced late after hitting a session low of US$4.92, its lowest price since Oct. 7. The contract settled near its session high of US$5.5 3/4.
U.S. wheat prices have tumbled during the past week, but the U.S. has not gained an upper hand on the export market because world prices have also dropped, traders said. The Black Sea region and Europe remain tough competitors for business.
"It looks pretty dismal," an analyst said.
Minneapolis Grain Exchange
MGE March wheat approached US$5 but did not break below it. The contract touched a session low of US$5.01, its lowest price Oct. 5, and closed nearer its session high of US$5.14 1/4.
