US Wheat Review on Wednesday: Stabilizes after dip, ends near unchanged

 

 

U.S. wheat futures closed near unchanged Wednesday as the markets stabilized after prices drifted into the low end of their trading range.

 

Nearby Chicago Board of Trade May wheat ended down 3/4 cent, or 0.2%, at US$4.76 a bushel. Kansas City Board of Trade May wheat finished 1/4 cent, or 0.05%, higher at US$4.85 1/4. Minneapolis Grain Exchange May wheat slipped 1 3/4 cents, or 0.3%, to US$5.03 1/4.

 

The markets consolidated a bit after CBOT May wheat overnight touched US$4.72, the contract low that was set in early October. Funds are already heavily short in CBOT wheat and didn't need to be aggressive about pushing prices lower, a trader said.

 

Below US$4.72, the next downside price objective in CBOT May wheat is US$4.66 1/2, according to technical analysis firm FuturesTechs. Wednesday's open-outcry session low was US$4.73, and the contract traded in a small range of 6 3/4 cents.

 

There was a lack of strong leadership from neighboring CBOT corn, which has been giving wheat direction, a trader said. Corn traded both sides of unchanged and ended slightly higher. The grains are linked because both are used for animal feed.

 

 

Kansas City Board of Trade

 

KCBT wheat ended slightly higher, despite slight losses at CBOT and KCBT. The May contract had a tight trading range of 6 1/2 cents.

 

Fresh news was scarce. Bearish fundamentals of large supply and weak export demand are well known.

 

The market fought off bearish signals from a stronger U.S. dollar, which is normally seen as unsupportive because of the perception that it makes U.S. commodities less attractive to foreign buyers and reduces investors' appetite for risk.

 

 

Minneapolis Grain Exchange

 

MGE wheat finished weaker in choppy trading. The markets are lacking strong direction as traders wait for the U.S. Department of Agriculture to issue its prospective plantings report March 31, a trader said.

 

The report will give market participants their first glimpse at planting intentions for U.S. hard red spring wheat, traded at the MGE. Planting will begin in late April.