US Wheat Review on Thursday: Ends mostly up following late gains

U.S. wheat futures shook off losses ahead of the close of trading Thursday and finished mostly higher in a small recovery from recent weakness.

 

Chicago Board of Trade March wheat ended up 2 cents, or 0.4%, at US$4.99 1/2 per bushel. Kansas City Board of Trade March wheat slipped 1 cent, or 0.2%, to US$5.03 1/2. Minneapolis Grain Exchange March wheat rose 1 3/4 cents, or 0.3%, to US$5.12 1/2.

 

Prices likely felt some support from late profit-taking by holders of short, or sold, positions after the steep drop in prices, a trader said. CBOT March wheat has tumbled 13% from its Jan. 11 high amid bearishness about large supplies.

 

Thursday was the second consecutive day that the markets pared losses ahead of the close of trading. The markets on Wednesday ended weaker but well off their session lows.

 

It seems the grains are trying to get into a consolidation mode, said John Kleist, broker and analyst for Allendale. The supply and demand storyline for wheat remains unsupportive.

 

"While there are no overtly bullish fundamentals, there may be saturation of short selling," Kleist said.

 

CBOT March wheat closed above its session low of US$4.93 but just below the psychologically important level of US$5. Commodity funds bought an estimated 2,000 wheat contracts at CBOT.

 

 

Kansas City Board of Trade

 

KCBT March wheat finished above its session low of US$4.97 1/2. The contract traded in a tight range of 7 1/2 cents.

 

KCBT wheat "had a harder time keeping up with the gains" in the other markets, although it still ended off its lows, a floor trader said. Late gains in CBOT March corn were seen providing spillover supportive for wheat.

 

 

Minneapolis Grain Exchange

 

MGE March wheat finished above its session low of US$5.07 1/2. The contract traded in a range of 6 cents.

 

The small gains at CBOT and MGE are "nothing" compared to heavy recent sell-offs, a trader said. It will be difficult for the markets to sustain strong gains because the market mentality is to sell rallies, he said.