US Wheat Review on Monday: Pares gains, closes barely higher

 

 

U.S. wheat futures eked out small gains Monday in a lackluster bounce from heavy, recent losses.

 

Chicago Board of Trade March wheat closed up 3/4 cent, or 0.2%, at US$4.74 3/4 a bushel. Kansas City Board of Trade March wheat rose 1/2 cent, or 0.1%, to US$4.87 1/2. Minneapolis Grain Exchange, or MGEX, March wheat gained 1/2 cent, or 0.1%, to US$5.01 1/4.

 

The markets finished off session highs as the mentality is to sell rallies, traders said. CBOT March wheat in electronic trading touched US$4.83 3/4 before trimming gains.

 

The markets' inability to have a significant "dead-cat bounce" after tumbling in January was disappointing, a CBOT trader said. CBOT March wheat is due for a rebound after losing 67 1/2 cents in January, he said.

 

There was a lack of fresh news out for the markets to digest. The supply and demand story line remains unsupportive, with U.S. wheat ending stocks at a 22-year high. Export demand for U.S. wheat is lagging due to competition for business from other countries.

 

Commodity funds bought an estimated 1,000 wheat contracts at CBOT.

 

 

Kansas City Board of Trade

 

KCBT March wheat finished below its session high of US$4.94.

 

The markets are trying to consolidate after falling hard last month, a trader said. They are short-term oversold and due for a bounce but facing headwinds from large supplies and worries about demand, he said. Weekly U.S. wheat export inspections of 17.843 million bushels were above trade expectations of 9 million to 17 million.

 

In other news, a wet storm system expected to move across the southern U.S. from Wednesday to Thursday should boost soil moisture for dormant hard red winter wheat and soft red winter wheat, according to T-storm Weather, a private forecaster. Recent precipitation in HRW wheat areas has already added some moisture to the soil, a trader said.

 

 

Minneapolis Grain Exchange

 

MGEX March wheat hit a session high of US$5.08 before paring gains.

 

It seems as though domestic millers have found some value in MGEX wheat around current price levels, a broker said. Traders are "all waiting for something to make this market move," he said. They have their eyes on the U.S. Department of Agriculture's next crop production and supply/demand reports, due out Feb. 9.