US Wheat Review on Wednesday: Drops in line with corn, soybeans

 

 

U.S. wheat demonstrated continued weakness Wednesday, a reflection of losses posted in the neighboring markets that wheat has been watching for direction.

 

Chicago Board of Trade March wheat lost 4 3/4 cents to US$5.10 3/4 per bushel, at the bottom end of a 7 1/2-cent trading range. The most actively traded May contract dropped 5 cents to US$5.23. Kansas City Board of Trade May wheat shed 4 1/2 cents to US$5.54 1/2. Minneapolis Grain Exchange May wheat added 1/2 cent to US$6.02 3/4.

 

Speculative funds sold at 2,000 contracts at the CBOT, according to midday estimates.

 

"Wheat is really in the doldrums," said Tim Hannagan, senior market analyst at Alaron Trading. "It's been the tail of the dog to soybeans and corn."

 

With hard red winter wheat in dormancy in the U.S. and China, the crop is more susceptible to the movements of corn and soybeans, which have been moving in response to South American weather patterns, Hannagan said.

 

"Wheat will have thoughts of its own in March," he added. "Our demand has been very poor. If we break dormancy in March and in 98% of the hard red winter wheat areas crop ratings improve, when we get to April and May we're probably gonna see strong demand, primarily for high-quality, high protein wheat."

 

A stronger U.S. dollar atop weak export demand put added pressure on wheat Wednesday.

 

"We had a big break yesterday and we are coagulating a little today," a CBOT floor broker says, noting wheat exhibited a mixed, low-volume trade.

 

"As we approach options expiration Friday, even the options are quiet," he added.

 

Export sales figures, usually released Thursday, will be delayed until 8:30 a.m. EST Friday.

 

 

Kansas City Board of Trade

 

Hard red winter wheat futures "traded both sides of unchanged today, still reeling after yesterday's heavy liquidation in wake of global economic concerns and losses in financial markets," according to the Kansas City Board of Trade's afternoon commentary.

 

"The U.S. dollar was stronger again this morning, traders said, weighing on wheat futures prices at midday," the KCBT said. "The market opened lower, came back higher, and ran out of buying interest again."

 

 

Minneapolis Grain Exchange

 

Hard red spring wheat ended mixed with the front month contract at an 17 1/4-cent premium to the May, as tight stocks in Duluth promise an interesting delivery period for the nearby contract.