US Wheat Review on Thursday: Rises on profit-taking by shorts

 

 

U.S. wheat futures bounced Thursday amid profit-taking by holders of short positions, traders said.

 

Chicago Board of Trade March wheat ended up 3 1/4 cents, or 0.7%, at US$4.87 a bushel. Kansas City Board of Trade March wheat rose 4 1/4 cents, or 0.9%, to US$4.94 3/4. Minneapolis Grain Exchange March wheat gained 3 3/4 cents, or 0.7%, to US$5.08 1/2.

 

The markets were overdue for a recovery after pressure from large supplies, unimpressive demand and weakness in neighboring markets pushed down prices in recent weeks, traders said. Nearby contracts on Wednesday settled at their weakest prices since early October.

 

Non-commercial speculative funds hold a net short position in CBOT wheat, which leaves the market vulnerable to short-covering, an analyst said. Commodity funds bought an estimated 1,000 contracts at CBOT, a floor trader said.

 

CBOT March wheat has technical support at US$4.80 a bushel, an analyst said. The nearby contract's open outcry session low Wednesday and Thursday was US$4.83.

 

 

Kansas City Board of Trade

 

Technical buying and profit-taking by shorts helped boost KCBT wheat, traders said. Large supplies continue to hang over the market, they said.

 

Total weekly U.S. wheat export sales for the week ended Jan. 21 were 689,200 tonnes, toward the high end of trade estimates of 300,000 to 800,000 tonnes. The sales were "good, but they're not great," a trader said.

 

Traders have been hoping that the recent drop in prices will attract strong export sales. The USDA said last week that sales for the week ended Jan. 14 were a marketing-year high, but Egypt on Wednesday bought Russian wheat in a tender and none from the U.S.

 

 

Minneapolis Grain Exchange

 

There are ideas MGE wheat should see price support relative to the other markets to secure wheat acres for the spring planting, analysts said. The MGE trades hard red spring wheat, sown in the northern Plains and used to make bread.

 

It's important for the market to convince farmers to plant spring wheat because U.S. winter wheat plantings are at a 97-year low, an analyst said. Many farmers turned away from seeding winter wheat last fall because of low prices and planting delays.