US Wheat Review on Thursday: Ends near lows in setback, stays in range

 

 

U.S. wheat futures settled near session lows Thursday on spillover pressure from other markets and as traders booked profits.

 

Chicago Board of Trade May wheat ended down 10 cents, or 1.9%, at US$5.03 3/4 a bushel. Kansas City Board of Trade May wheat lost 8 1/2 cents, or 1.6%, to US$5.07 1/2. Minneapolis Grain Exchange May wheat dropped 8 3/4 cents, or 1.7%, to US$5.16 1/4.

 

The markets pulled back from gains Wednesday amid a lack of fundamental support but remained range bound. CBOT May wheat is trading within a range of US$5.25 to US$4.92, said Joe Victor, vice president of marketing at Allendale.

 

Wheat is seen as a follower and slumped with CBOT corn, soy and crude oil, a trader said. The markets are related because funds often trade in a basket of commodities. Corn and wheat also are both used for animal feed.

 

Commodity funds sold an estimated 4,000 wheat contracts at CBOT. CBOT May wheat finished near its session low of US$5.01 3/4.

 

Traders are looking ahead to first notice day for March futures contracts Friday, which is the first day that notices of intention to deliver actual commodities against futures-market positions can be received. Traders expect CBOT March wheat deliveries to be 3,000 to 5,000 contracts.

Kansas City Board Of Trade

 

KCBT May wheat finished near its session low of US$5.05 1/2.

 

The fundamental story line for wheat is unsupportive because U.S. and world supplies are large and there is tough competition for export business. The International Grains Council raised its estimate for 2009-10 wheat production to 675 million tonnes, up 1 million tonne on the month. That was "a little bit more than some of the estimates that are floating around" and reaffirmed the overall fundamental story in the markets, a broker said.

 

 

Minneapolis Grain Exchange

 

MGE May wheat finished near its session low of US$5.15.

 

Total weekly U.S. wheat export sales of 409,000 tonnes were within trade expectations. The business was "ok" but nothing to get overly excited about, a trader said.