US Wheat Review on Monday: Gives back last week's gains

 

 

U.S. wheat futures on Monday extended a back-and-forth trading pattern and erased most of their gains from last week amid technical selling and a lack of fundamental support.

 

Chicago Board of Trade May wheat fell 14 3/4 cents, or 2.8%, to US$5.04 1/2 a bushel. Kansas City Board of Trade May wheat finished down 10 3/4 cents, or 2.1%, at US$5.10 1/4. Minneapolis Grain Exchange May wheat lost 12 3/4 cents, or 2.4%, to US$5.16 3/4.

 

CBOT May wheat retreated after ending up 15 1/4 cents on the week on Friday. The market is in a sideways trading pattern, a trader said, and has alternated between higher and lower closes for the past six sessions.

 

There was a lack of fundamental support to extend Friday's gains, which were supported by short-covering and expectations that fund money would flow into the grain markets at the start of the month, traders said. U.S. supplies are ample, and there is stiff competition for export business.

 

Bulls were disappointed commodity funds did not buy the grains as expected Monday, an analyst said. They sold an estimated 4,000 wheat contracts at CBOT.

 

CBOT May wheat took out last week's low of US$4.99 with its Monday low of US$4.96 1/4. Strength in the U.S. dollar added to the bearish psychology in the grains amid ideas it makes U.S. grains less attractive to foreign buyers, a trader said.

 

 

Kansas City Board of Trade

 

KCBT May wheat gave back nearly all of last week's gains. On Friday, it ended up 11 3/4 cents on the week.

 

There was pressure from news that Iraq's state-run Grain Board bought 380,000 tonnes of wheat from Russia, Canada and Australia for delivery in July and August but none from the U.S. There was some chatter that Iraq may have secured some U.S. wheat in another deal, a trader said, but that could not be confirmed.

 

"Everybody's still bearish wheat," an analyst said. "There's just so much wheat around."

 

 

Minneapolis Grain Exchange

 

MGE May wheat on Friday closed up 10 cents on the week. It gave back all those gains and then some Monday.

 

It is "easy to find sellers for wheat" because of weak fundamentals, a trader said. Brokers are still advising participants to sell rallies.