US Wheat Review on Thursday: Settles lower in setback from gains

 

 

U.S. wheat closed lower Thursday in a small retreat from recent gains but traded both sides ahead of the end of the day session.

 

Chicago Board of Trade March wheat ended down 3 1/4 cents, or 0.7%, at US$4.93 1/2 a bushel. Kansas City Board of Trade March wheat dropped 4 1/2 cents, or 0.9%, to US$5.01 1/4. Minneapolis Grain Exchange March wheat slipped 4 3/4 cents, or 0.9%, to US$5.10 1/2.

 

Wheat pulled back after leading the upside in the grains and soy Wednesday amid technical buying and short-covering, traders said. CBOT March wheat climbed 14 1/2 cents Wednesday and was up 23 1/2 cents for the week at the close of trading Wednesday.

 

"Today we kind of set it back," said Sid Love, analyst for Kropf & Love Consulting.

 

CBOT March wheat traded within Wednesday's range. The contract had hit a high of US$5.01 1/2 and a low of US$4.86.

 

Despite settling lower, the contract closed above its 20-day moving average around US$4.90 1/4. It was the second consecutive day CBOT March wheat settled above the 20-day moving average.

 

Commodity funds sold an estimated 2,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT March wheat traded from US$5.09 to US$4.97 1/4, which was within Wednesday's range. The contract ended above US$5 for the second consecutive day. Prior to Wednesday, it had not settled above US$5 since Jan. 25.

 

Wednesday's rally alerted bears that they had "better be careful" because the markets have the potential to pop higher, said Larry Glenn, broker and analyst at Frontier Ag. Prices are not going to the moon because the supply and demand storyline remains bearish, but CBOT and KCBT March wheat each have the potential to move 20 cents to 25 cents higher, he said.

 

 

Minneapolis Grain Exchange

 

Fundamentals for the wheat markets remain bearish because supplies are ample and there is stiff competition for export business, traders said. The U.S. Department of Agriculture is slated to issue weekly U.S. export sales data Friday, one day later than normal because of the severe snowstorm that hit the east coast. Analysts expect U.S. wheat export sales to be 250,000 to 500,000 tonnes.