US Wheat Review on Friday: Retreat, fundamentals weigh on prices

 

 

U.S. wheat futures ended lower Friday, finishing the trading week on weak footing as bearish underlying fundamentals continued to weigh on the market.

 

Futures dropped to two-week lows, as lackluster export demand and ample world supplies keep a negative grip on prices.

 

Chicago Board of Trade May wheat ended 8 3/4 cents lower or 1.74% at US$4.93 1/2, Kansas City Board of Trade May wheat settled 7 1/4 cents lower or 1.43% at US$5.00 1/2, and Minneapolis Grain Exchange May wheat finished 7 1/2 cents lower or 1.44% at US$5.12 1/4.

 

Wheat suffers from the same old story, poor U.S. export demand, with U.S. prices non-competitive with competing world export supplies, said John Kleist, broker/analyst at Allendale Inc. The market was also saddled with new bearishness this week associated with the potential for increased competition from India and Argentina.

 

"Other fundamental news likely ham-stringing wheat Friday was the fact that the winter wheat crop in Kansas is rated 3% better than last year, with over an inch of rain expected to hit the southern plains, hard-red wheat belt next week," said Mike Zuzolo, president of Global Commodity Analytics and Consulting. "If these rains materialize, potential winter-kill damage as the crop comes out of dormancy looks much less likely," he added.

 

The wheat market doesn't have the fundamental base to support a rally, and with the lost psychological strength of higher corn prices and a weaker U.S. dollar, futures were left without a supportive outside feature.

 

In CBOT trades, speculative fund selling was estimated at 3,000 lots.

 

 

Kansa  City Board of Trade

 

KCBT wheat ended lower, following the lead of Chicago wheat in the face of bearish export demand, a KCBT wheat trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended lower, with bearish world supply side fundamentals continuing to pressure on prices, traders said.