US Wheat Review on Friday: Stumbles on outside market pressure

 

 

U.S. wheat futures stumbled into the weekend amid pressure from outside markets and technical selling.

 

Chicago Board of Trade May wheat slipped 7 1/4 cents to US$5.07 1/4 a bushel. Kansas City Board of Trade March wheat fell 10 cents to US$5.50, and Minneapolis Grain Exchange May wheat shed 5 cents to US$6.07 3/4.

 

Weakness in equities and crude oil and strength in the U.S. dollar were bearish influences on the grains Friday, traders said. A firm dollar makes U.S. wheat less competitive on the world export market.

 

The markets consolidated ahead of two government crop reports due out next week, an analyst said. The U.S. Department of Agriculture is slated to issue its prospective plantings and quarterly grain stocks reports at 8:30 a.m. EDT Tuesday.

 

"This type of action is fairly typical for a pre-report consolidation," said Greg Wagner, senior commodity analyst for AgResource Co.

 

Snow in the U.S. Plains hard red winter wheat belt continued to weigh on the markets, analysts said. The moisture should help improve the condition of the crop after a dry winter, they said.

 

The technical picture looks "bleak" after CBOT May wheat set a session low of US$5.03, its lowest open outcry price since March 3, a floor trader said. Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat fell in a setback from a bounce Thursday amid pressure from the outside markets and some profit-taking, a trader said. The blizzard in the HRW wheat belt added pressure, he said.

 

"You get moisture in this wheat - wheat's a miracle plant," said Kim Anderson, Oklahoma State University agricultural economics professor. "It can recover relatively fast."

 

Heavy snow fell across much southern Kansas and in the Oklahoma and Texas panhandles, according to T-Storm Weather. Much of the HRW wheat belt "will have benefited from a major moisture boost," the private weather firm said.

 

 

Minneapolis Grain Exchange

 

Spring wheat planted area will be a main focus for the wheat markets when the USDA issues its reports Tuesday, traders said. Plantings are expected to drop 3.5% from last year following a decline in prices, analysts said.

 

Excessive wetness and flooding could reduce plantings further, analysts said. Spring wheat plantings are "kind of the joker in the deck right now" for wheat because of uncertainty about acreage, Anderson said.

 

The average of analysts' estimates for plantings of spring wheat other than durum is 13.639 million acres, down from the 14.135 million acres planted last year, according to a Dow Jones Newswires survey of 12 analysts. The range of estimates was 13 million to 14.077 million.