US Wheat Review on Friday: Stumbles on lack of news, spillover

 

 

U.S. wheat futures stumbled Friday on worries about the economic slowdown and a lack of fresh bullish news.

 

Chicago Board of Trade May wheat fell 3 1/2 cents to US$5.21 1/2 per bushel. Kansas City Board of Trade May wheat slipped 2 cents to US$5.60, and Minneapolis Grain Exchange May wheat lost 2 1/4 cents to US$6.06 1/4.

 

Jitters about the economy loomed over the grain markets amid concerns that demand will suffer as a result of the global downturn, an analyst said. Losses in crude oil and equities kept some traders on the sidelines, he said.

 

A slide in CBOT corn added pressure to wheat, an analyst said. May corn closed down 11 1/2 cents at US$3.59.

 

There was some position evening and short covering ahead of the end of the month, said Tim Hannagan, analyst for Alaron. CBOT May wheat finished down 9 cents on the week and 59 1/4 cents on the month.

 

"There's a lot of book balancing going on," Hannagan said.

 

 

Kansas City Board of Trade

 

There was underlying support for wheat from concerns about dryness in the U.S. central and southern Plains, Hannagan said. Hard red winter wheat in areas has struggled this winter without much moisture.

 

"I see people wanting to buy these breaks now, starting today and probably early next week, because the forecasts are very bullish and we're going to need to build a weather premium," Hannagan said. "There's a floor of psychology. We're heading into March. Every year in March, [plants] break dormancy."

 

KCBT May wheat finished down 3 1/2 cents on the week and 52 1/4 cents on the month.

 

 

Minneapolis Grain Exchange

 

MGE May wheat closed up 1 cent on the week and down 39 3/4 cents on the month.

 

There was an absence of fresh news, traders said. The U.S. Department of Agriculture, at its annual Agricultural Outlook Forum, estimated 2009-10 U.S. wheat plantings at 58 million acres, down from 60.5 million acres last year.

 

The estimate wasn't surprising because plantings were expected to be down following a drop in prices, analysts said. Grain traders are more interested in acreage estimates for corn and soybeans than in estimates for wheat, Hannagan said.

 

Winter wheat, traded at the CBOT and KCBT, is planted in the fall. Spring wheat, traded at the MGE, is planted in the spring and competes with soy and corn in some areas.

 

"They expect wheat to lose some acres because there's room to lose some acres," Hannagan said about traders. "The real battle for acres, most of the trade believes, is between corn and beans."