US Wheat Review on Monday: Jumps on short-covering, position-evening

 

 

U.S. wheat futures closed near session highs Monday on short-covering and positioning ahead of key government crop reports.

 

Nearby Chicago Board of Trade May wheat jumped 5 1/4 cents to US$5.12 1/2 a bushel. Kansas City Board of Trade May wheat rose 4 1/2 cents to US$5.54 1/2, and Minneapolis Grain Exchange May wheat gained 3 1/2 cent to US$6.11 1/4.

 

Trend-following speculative funds were net short 31,815 contracts in CBOT wheat futures and options as of March 24, the Commodity Futures Trading Commission said in a supplemental Commitments of Traders report. Commodity funds bought an estimated 2,000 contracts at the CBOT Monday, traders said.

 

CBOT May wheat closed a hair below its open-outcry session high of US$5.13. The CBOT trades soft red winter wheat, grown in the eastern Midwest and used to make pastries and snack foods.

 

Volume was light ahead of the release of the U.S. Department of Agriculture's prospective plantings and quarterly grain stocks reports, due at 8:30 a.m. EDT Tuesday, traders said. The plantings report should be a bigger market-mover for corn and soybeans than for wheat, they said.

 

Wheat could feel spillover support if the report turns out to be bullish for corn, a CBOT floor trader said. It is generally expected to show a shift in U.S. acres to soybeans from corn.

 

 

Kansas City Board of Trade

 

KCBT wheat closed higher on pre-report positioning after trading both sides during the day session, a trader said. Strength in the U.S. dollar and weakness in outside markets pressured KCBT wheat earlier in the session, he said.

 

Dryness is still a "major concern" in parts of the U.S. hard red winter wheat belt, even though a blizzard brought moisture to the region, Cropcast Agricultural Weather said. Western Kansas, western Oklahoma, southern Nebraska and far eastern Colorado have seen less than 20% of normal precipitation during the past 45 days, according to the private weather firm.

 

KCBT May wheat hit an open-outcry session high of US$5.55. HRW wheat, used to make bread, is traded at the KCBT.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed higher amid position-squaring in front of the USDA reports, traders said. Hard red spring wheat, used to make bread, is grown in the northern Plains and traded at the MGE. MGE May wheat hit a session high of US$6.13 3/4.

 

There is uncertainty about spring wheat acreage due to flooding in the Red River Valley, said Jerry Gidel, analyst for North America Risk Management Services. "The acreage numbers are going to be a little suspect" Tuesday because weather could affect what goes in the ground, he said.

 

A wet and chilly pattern is expected to continue across much of the central U.S. during the next seven to 10 days, according to T-Storm Weather. That will "prevent pre-planting across the spring wheat belt, while probably leading to delayed planting later in April," the private weather firm said.