US Wheat Review on Thursday: Ends mostly lower on spillover; Minneapolis Grain Exchange rises

 

 

Spillover selling from losses in other markets drove U.S. wheat futures mostly lower Thursday, although nearby Minneapolis Grain Exchange wheat felt support from a lack of available supplies.

 

Chicago Board of Trade March wheat fell 5 cents to US$5.66 3/4 per bushel. Kansas City Board of Trade March wheat slipped 2 1/2 cents at US$5.98, and MGE March wheat jumped 4 1/4 cents at US$6.51 1/2.

 

Weakness in equities, crude oil and CBOT soybeans weighed on the grains during the session, traders said. A firm U.S. dollar added pressure because it gives foreign importers less buying power, they said.

 

The markets are hopeful demand will pick up following a sale to Egypt on Wednesday, said Larry Glenn, broker/analyst at Frontier Ag. However, there hasn't been enough fresh news out to knock the markets out of a sideways-type trade, he said.

 

"We're just trading back and forth, with nobody wanting to take control, neither the bulls nor the bears," Glenn said. "There's still a lot of outside market influence that is pushing things around."

 

U.S. wheat looks more competitive on the world market than it has been, analysts said. However, there is still stiff competition from the Black Sea region and Europe, they said. Egypt bought 178,000 tonnes of Russian, French and U.S. soft red winter wheat in the tender Wednesday.

 

"Definitely we're demand driven right now," Glenn said about the markets. "We have hope for demand. I think it's positive the Black Sea prices are coming up."

 

CBOT March wheat ended above its session low and 50-day moving average of US$5.58. The area is seen as a support level, a trader said.

 

 

Kansas City Board of Trade

 

There was some chatter in the market about a lack of rain in hard red winter wheat areas of the U.S. Plains, Glenn said. The dryness merits watching, although it's too early to worry too much about it, he said.

 

KCBT March wheat faces resistance near US$6.17 and support in the area around US$5.80, Glenn said. The contract ended above its session low of US$5.90.

 

 

Minneapolis Grain Exchange

 

MGE March and May wheat bucked the lower trend in the other markets and closed higher on support from tight available supplies of spring wheat, a market analyst said.

 

May wheat closed up 2 cents at US$6.44 3/4.

 

Farmers continue to sit on their grain and wait for prices to rise, the analyst said. Deliverable stocks at Duluth as of Jan. 16 were 7.84 million bushels, which is "historically very tight," he said.

 

"There's not a lot of wheat moving right now," the analyst said. Farmers "combined US$9 spring wheat and now it's sitting at US$6 on the board. They're perfectly happy sitting on it."