March 4, 2008

 

US Wheat Review on Monday: Ends mostly up in bounce; locals sell Minneapolis Grain Exchange

 

 

U.S. wheat futures closed mostly higher Monday in a rebound from long liquidation last week, analysts said.

 

Chicago Board of Trade May wheat ended up 16 1/2 cents at US$11.02 1/2 per bushel. Kansas City Board of Trade May wheat rose 10 3/4 cents to US$11.70 3/4, and Minneapolis Grain Exchange May wheat closed limit down, 60 cents lower, at US$15.59 3/4.

 

CBOT and KCBT wheat futures bounced a bit after a sharp pullback from record highs last week, said Tom Leffler, owner of Leffler Commodities. There also was some spillover support from rallies in the neighboring CBOT soy complex and in outside markets, such as crude oil, traders said.

 

"I think it was due to come back after the long liquidation that we saw in the market last week," Leffler said about the wheat markets. "It's a money game right now."

 

There were some ideas new money was coming into the market as it was the start of a new month, analysts said. Commodity funds bought an estimated 3,000 contracts at the CBOT.

 

Solid global demand also offered some support, an analyst said. Egypt's state-owned General Authority for Supply Commodities said during the weekend that it bought 125,000 metric tones of Russian and U.S. soft red wheat in a tender.

 

Of the total, GASC bought 25,000 tones of Russian wheat and 25,000 tonnes of Russian and/or U.S. soft red wheat from local trader Horus, an official said. GASC also purchased 25,000 tonnes of Russian wheat from Cargill and 50,000 tonnes of Russian wheat from Louis Dreyfus, he said.

 

Last week, the state-run Grain Board of Iraq bought 700,000 metric tones of U.S., Australian and Canadian wheat at prices ranging between US$500, free on board, to US$670/tonne, cost and freight, traders said. The wheat was for delivery in April and May, they said.

 

"We're in a new month, and we're seeing global demand still relatively strong, with Iraq and Egypt still in the market," said Terry Reilly, analyst for Citigroup in Chicago.

 

Deliveries posted against the CBOT March wheat future were 162 contracts. The last trade date assigned was Feb. 22.

 

 

Kansas City Board of Trade

 

KCBT wheat futures closed higher as new money came into the market at the start of the month, a floor trader said. The market was due for a bounce after coming under heavy pressure late last week, he said.

 

There were no deliveries against the KCBT March wheat future.

 

The U.S. Department of Agriculture said weekly wheat export inspections were 16.298 million bushels. That was within trade expectations of 14 to 19 million.

 

Wheat in the central southern Plains received a boost from some snow or rain, DTN Meteorlogix said. However, western regions are still lacking moisture. There is some chance for light snow in the next couple days, the private weather firm said.

 

 

Minneapolis Grain Exchange

 

CBOT, KCBT and MGE May wheat briefly touched limit up, 60 cents higher, at the opening on follow-through buying from the overnight and a bounce from recent weakness, traders said. However, MGE May wheat eventually turned lower and ended limit down, 60 cents lower, after locals sold at the close, a floor trader said.

 

MGE May and July slumped even though Prudential bought 400 MGE July wheat at the close, the trader said.

 

"The locals were just hammering on it," he said.

 

There were no deliveries against the MGE March wheat future.