US Wheat Review on Friday: Stumbles on pre-weekend profit-taking

 

 

U.S. wheat futures stumbled Friday as traders took money off the table ahead of the weekend.

 

Chicago Board of Trade May wheat closed down 5 cents at US$5.50 1/4 a bushel, up 32 cents on the week. Kansas City Board of Trade May wheat closed down 3 cents at US$6.03, up 33 cents on the week. Minneapolis Grain Exchange May wheat closed 3 1/2 cents lower at US$6.35 3/4, up 26 1/2 cents on the week.

 

Profit-taking pressured wheat after rallies Thursday and earlier in the week, traders said. Forecasts for some rain in parts of the U.S Plains early next week hung over the markets, they said.

 

Despite the setback, dryness in the U.S. southern Plains is still a concern for hard red winter wheat, traders said. The region needs moisture as plants are emerging after a dry winter, they said.

 

"The rains they're talking about... are maybe only going to hit 35% of the growing area," said Tim Hannagan, analyst for Alaron. "It won't be a lot. The fear is it might be more, so why take the risk of buying?"

 

Export demand continues to look weak for U.S. soft red winter wheat, traded at the CBOT, a broker said. U.S. wheat is too pricey to compete with Russian and European wheat on the global market, he said. SRW wheat is used to make pastries and snack foods. 
 

Commodity funds sold an estimated 2,000 contracts at the CBOT. Volume was light going into the weekend, traders said.

 

 

Kansas City Board of Trade

 

Precipitation in the southwestern U.S. Plains will be "insignificant during the coming two weeks," World Weather Inc. said. Showers may occur by midweek next week, but the "resulting rainfall will prove inadequate in changing crop or field conditions," the private weather firm said in a forecast.

 

Traders will reassess weather conditions Monday to see how much rain is falling and whether it's hitting key crop areas, Hannagan said. HRW wheat, traded at the KCBT, is used to make bread.

 

"It's going to be when we come in Monday, 'Is it raining and where?'" Hannagan said. "They'll know Monday because it'll be on top of us."

 

 

Minneapolis Grain Exchange

 

Profit-taking drove MGE wheat lower with the other markets. There was room to pull back after previous advances, a trader said.

 

There are mounting worries about the potential for spring planting delays in U.S. northern Plains states because of excessive wetness, analysts said. Heavy snowfall during the winter and rain have saturated the soil in certain areas, including eastern North Dakota and the Red River Valley. Farmers in those areas usually plant more corn and soybeans than hard red spring wheat, said Joel Ransom, a North Dakota State University extension agronomist.