US Wheat Review on Thursday: Hits fresh contract lows on hefty supply

 

 

Pressure from large ending stocks and steep losses in neighboring Chicago Board of Trade soy futures drove U.S. wheat futures to fresh five-month and contract lows Thursday.

 

CBOT May wheat ended down 2 3/4 cents, or 0.6%, at US$4.78 3/4 a bushel. Kansas City Board of Trade May wheat lost 1 1/2 cents, or 0.3%, to US$4.89 1/2. Minneapolis Grain Exchange May wheat dropped 2 cents, or 0.4%, to US$5.04 1/2.

 

The U.S. Department of Agriculture's March supply and demand report, issued Wednesday, continued to weigh on prices. It was "an eye opener for the wheat market to see a carryout of 1 billion bushels" in the report, said Tom Leffler, owner of Leffler Commodities.

 

The USDA raised its carryout estimate to a 22-year high of 1 billion bushels from its February estimate of 981 million. The increase took some market participants by surprise because most analysts in a pre-report survey projected the government would trim its carryout estimate.

 

CBOT May wheat hit a fresh five-month low of US$4.75 1/2, below Wednesday's low of US$4.78. It will set a new contract low if it dips below the October low of US$4.72.

 

Commodity funds sold an estimated 2,000 wheat contracts at CBOT.

 

 

Kansas City Board of Trade

 

KCBT May wheat set a fresh contract low of US$4.86, below the previous low of US$4.86 3/4. That was the low set Oct. 4 and 5.

 

It did not help wheat "to see soy take it on the chin," Leffler said. May soy finished down 27 1/2 cents, or 2.9%, on weak export demand and erased gains from Wednesday.

 

Wheat is technically oversold after recent losses and due for a bounce, a broker said. He has told clients that technical rallies and weather scares about the upcoming winter wheat crop will provide some opportunities to sell wheat, but the "best opportunities are way, way, way behind you."

 

 

Minneapolis Grain Exchange

 

MGE May wheat set a fresh contract low of US$5.02 1/2. That took out the previous contract low of US$5.04, set Wednesday.

 

Prices fell even though total weekly U.S. wheat export sales 448,400 tonnes were toward the high end of trade expectations. The U.S. still faces intense competition for export business on the world market, and the weekly sales weren't "anything to brag about," a broker said.