US Wheat Review on Monday: Slips on weak demand, outside pressure

 

 

Disappointment about export demand weighed on U.S. wheat futures Monday, as the markets extended losses from last week.

 

Chicago Board of Trade May wheat closed down 9 cents at US$5.21 1/2 a bushel. Kansas City Board of Trade May wheat lost 6 3/4 cents to US$5.56 3/4, and Minneapolis Grain Exchange May wheat slipped 2 3/4 cents to US$6.02 1/2.

 

Egypt's state-owned General Authority for Supply Commodities, or GASC, bought 240,000 tonnes of Russian wheat in a tender during the weekend and none from the U.S. It was surprising the U.S. did not book any of the business after recent price setbacks, said Louise Gartner, analyst for Spectrum Commodities.

 

"Certainly that would be a player" in Monday's weakness, Gartner said about the Egyptian snub.

 

Strength in the U.S. dollar added pressure because it makes U.S. wheat less competitive on the world market, analysts said. There was a lack of strong spillover support from CBOT soy and corn during much of the day session, they said.

 

CBOT May wheat closed near its session low of US$5.21. The contract last week closed down 17 3/4 cents on the week.

 

Further losses in wheat should be limited heading into the growing season, Gartner said. The "extreme downside target" for CBOT May wheat is about US$5, she said.

 

"I just don't see the market really falling apart until we get more comfortable with what our crop prospects are," Gartner said.

 

The minimum upside target for CBOT May wheat moving forward is the January high around US$6.58, Gartner said. Above that level, there is resistance at US$7.20, US$7.60 and US$8.00, she said.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower on pressure from sluggish export demand and weak outside markets, traders said. There was some chatter about rains in dry wheat areas of China, they said.

 

KCBT May wheat closed near its session low of US$5.56. The contract last week closed down 20 1/4 cents on the week.

 

Dryness continues to be a concern for hard red winter wheat farmers in the U.S. southern Plains, analysts said. There is talk about the crop coming out of dormancy early in some areas due to warm weather.

 

 

Minneapolis Grain Exchange

 

MGE May wheat closed near its session low of US$6.02 1/4. The contract last week ended down 19 1/2 cents on the week.

 

Strength in the dollar and weakness in crude oil were bearish influences on wheat, an analyst said. Weekly U.S. wheat export inspections of 10.025 million bushels were below expectations of 14 million to 19 million bushels.