US Wheat Review on Wednesday: Slides to fresh four-month lows

 

 

U.S. wheat futures hit fresh four-month lows Wednesday and closed near session lows as the markets buckled under the pressure of fund selling and strength in the U.S. dollar.

 

Chicago Board of Trade March wheat ended down 18 1/4 cents, or 3.8%, at US$4.69 a bushel. Kansas City Board of Trade March wheat fell 15 3/4 cents, or 3.2%, to US$4.83 1/4. Minneapolis Grain Exchange March wheat dropped 13 1/2 cents, or 2.6%, to US$4.98 3/4.

 

The markets extended losses late as selling accelerated ahead of the close. CBOT March wheat ended just above its session low of US$4.68, its lowest price since Oct. 6.

 

Commodity funds sold an estimated 6,000 wheat contracts at the CBOT and were also sellers of CBOT corn and soy. Pressure from double-digit losses in the neighboring markets added to the bearish tonnee in wheat, traders said.

 

The losses in wheat erased Tuesday's bounce, which was supported by fund buying. CBOT March wheat needs to fall to around US$4.40 to be competitive with other feed grains for demand, said Bill Biedermann, senior vice president for Allendale.

 

It seems there was some pressure on wheat prices from increased producer selling, he said. U.S. producers are ramping up sales of wheat amid expectations that sales of corn will increase during the next month, he said. The grains are linked because both are used for animal feed.

 

Growers with wheat to sell "are starting to realize there's another flood of corn coming, and they're trying to beat the corn rush," Biedermann said.

 

 

Kansas City Board of Trade

 

KCBT March wheat settled near its session low of US$4.82 1/2, which was set in electronic trading. That was the contract's lowest price since Oct. 6.

 

Strength in the U.S. dollar pressured wheat because a firm dollar makes U.S. grain less attractive to foreign buyers, a trader said. Export demand for U.S. wheat has been lagging due to competition from other countries.

 

The U.S. Department of Agriculture at 8:30 a.m. EST Thursday is due to issue its weekly export sales report. Export sales of wheat are expected to be 300,000 to 650,000 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE March wheat closed above its session low of US$4.98, its lowest price since Oct. 5. That was also the last date the contract closed below US$5.

 

Technical selling helped to encourage wheat's slide, traders said. Technical charts look poor after recent selloffs, they said.