US Wheat Review on Monday: Falls on spillover, but ends above lows

 

 

U.S. wheat futures slipped Monday on spillover pressure from other markets, but finished above session lows.

 

Chicago Board of Trade March wheat ended down 4 1/4 cents at US$5.63 3/4 a bushel, above its open outcry session low of US$5.52. Kansas City Board of Trade March wheat sank 8 cents to US$5.93, and Minneapolis Grain Exchange March wheat lost 5 1/2 cents to US$6.46 1/2.

 

Trading was mostly technical, traders said. CBOT March wheat briefly fell below support around US$5.60, but trimmed losses to close above that level.

 

Wheat felt pressure from losses in CBOT soybeans and from weakness in outside markets, analysts said. A firm U.S. dollar weighed on wheat as it makes U.S. grain less attractive to foreign countries, they said.

 

There was "not a whole lot of news out there" for the markets to trade on, said Dave Marshall, an independent marketing adviser and commodities broker. Market participants continue to watch for fresh export news, a trader said.

 

Short-covering was seen as supportive, an analyst said. Speculative funds trimmed their net short position in CBOT wheat to 24,652 contracts as of Jan. 27, down from 29,974 contracts the previous week, according to a supplemental report from the Commodity Futures Trading Commission.

 

"We have kind of kept the main spec accounts on the short side of things," Marshall said.

 

 

Kansas City Board Of Trade

 

KCBT wheat led the downside, with the nearby March contract closing below US$6. Still, the contract finished above its open outcry session low of US$5.86.

 

"There wasn't any real great midday news to drive this thing" off its lows, a KCBT floor trader said. "It was really a slow day today, just kind of a sideways to lower chop. It looks like the US$6 barrier is a hard one to hold on to."

 

Concerns about dryness in the southwest U.S. Plains were "kind of putting a little bit of thin support" beneath KCBT wheat, the trader said. Hard red winter wheat areas of the Plains have struggled with dryness lately, although rain and snow could fall Sunday to Tuesday, T-Storm Weather said in a forecast.

 

"Precipitation over the last 60 days in the Plains has been near to less than 25% of average, and hard red winter wheat would benefit from precipitation," the private weather firm said. "Time exists for precipitation to return, but none is foreseen through at least Saturday."

 

 

Minneapolis Grain Exchange

 

MGE March followed CBOT wheat and soybeans lower, a trader said. March wheat hit a session low of US$6.41 3/4.

 

Weekly U.S. wheat export inspections were "disappointing," a trader said. The U.S. Department of Agriculture said inspections for the week ended Jan. 29 were 11.95 million bushels, below analysts' expectations of 15 million to 21 million.