US Wheat Review on Monday: Weakens late on profit-taking, spillover

 

 

U.S. wheat futures closed mixed and near unchanged Monday following a round of late profit-taking and sell-offs in neighboring markets.

 

Chicago Board of Trade May wheat closed down 1 cent at US$5.49 1/4 per bushel. Kansas City Board of Trade May wheat ended up 1 cent at US$6.04, and Minneapolis Grain Exchange May wheat rose 3 1/2 cents to US$6.39 1/4.

 

Market participants booked profits after wheat spent most of the day session in positive territory, a trader said. Wheat felt some pressure as CBOT corn slipped to a slightly lower close and as CBOT soybeans pared gains, another trader said.

 

"The whole thing kind of slid," he said about the agriculture floor.

 

CBOT May wheat hit its open-outcry high of US$5.61 shortly after the opening. Soybeans and corn also hit their session highs in early dealings.

 

Forecasts for rain in dry parts of the U.S. central and southern Plains this week hung over the markets, a trader said. The forecasts were seen as somewhat bearish because the hard red winter wheat belt has been struggling with dryness, he said

 

There was a lack of other fresh fundamental news for the markets, traders said. Weekly U.S. wheat export inspections of 22.388 million bushels were above trade estimates of 14 million to 19 million bushels.

 

 

Kansas City Board of Trade

 

The main fundamental story for KCBT wheat continues to be weather in the Plains, a trader said. Concerns persist about dryness, although "the midday forecast [was] showing a higher likelihood of beneficial rains," he said.

 

The HRW wheat belt needs rain as temperatures are warming up and plants are growing again after going dormant for the winter. HRW wheat is used to make bread.

 

"We continue to suspect that substantial totals may affect driest hard red winter wheat, but are cautious because the event is at least four days away," T-Storm Weather said in an update to its daily forecast.

 

Farmer movement wasn't aggressive on wheat. At the close, JP Morgan was noted as a buyer of May and UBS was selling May, a KCBT floor trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed firmer amid talk about the potential for fieldwork and planting delays in the U.S. northern Plains. Heavy snowfall and rains could cause flooding around the Red River Valley and keep farmers out of their fields, according to forecasts.

 

"We should see strength in spring wheat on the basis of all the snow in the Dakotas," said Sid Love, analyst for Kropf & Love Consulting.

 

Farmers could switch acres to other crops, such as soybeans, from spring wheat if wetness delays planting too long, crop specialists said. Spring wheat is used to make bread.