US Wheat Review on Wednesday: Ends mostly down in setback; Minneapolis Grain Exchange  May rises

 

 

U.S. wheat futures closed mostly lower Wednesday in a setback from a rally Tuesday, although nearby Minneapolis Grain Exchange May wheat extended its gains.

 

Chicago Board of Trade May wheat sank 7 1/4 cents to US$5.25 1/2 a bushel. Kansas City Board of Trade May wheat fell 7 1/4 cents to US$5.66, and MGE May wheat rose 4 1/4 cents to US$6.43 1/2.

 

Traders booked profits following a late surge Tuesday that was supported by fund buying, analysts said. Without the money flowing into the markets, wheat didn't have the fundamental strength to climb again, an analyst said. Commodity funds sold an estimated 4,000 wheat contracts at the CBOT.

 

"I think it's a little bit of a give-back trade from yesterday," said Jason Britt, president of Central State Commodities. "When you put on that much in one day, you're probably going to see a little bit of a give-back trade."

 

In U.S. Department of Agriculture reports on prospecting plantings and quarterly grain stocks issued Tuesday, "nothing in particular really stood out on that wheat as something we need to grab hold of and take off" higher on, Britt said. On Wednesday, "a little more of the reality of the situation" came in, he said.

 

Wheat could rebound Thursday if neighboring CBOT soybeans stabilize and outside markets are supportive, Britt said. The USDA's reports were considered bullish for soybeans. CBOT May wheat recovered a bit after hitting an open outcry session low of US$5.17.

 

 

Kansas City Board of Trade

 

KCBT wheat pulled back after Tuesday's rally, which was considered "overdone," traders said. There was a lack of fresh fundamental news, they said.

 

Moisture expected in the U.S. central and southern Plains should help hard red winter wheat, which struggled with dryness during the winter, analysts said. Western and northern Kansas are expected to receive 1/3 inch of precipitation Wednesday night, T-Storm Weather said in a forecast.

 

 

Minneapolis Grain Exchange

 

MGE May wheat closed higher but deferred contracts were lower. Concerns that flooding will delay and potentially reduce spring wheat plantings are seen as supportive to the market, a trader said.

 

Heavy snow has caused flooding in crop areas across the Dakotas and western Minnesota, including in the Red River Valley. Farmers could shift intentions to plant soybeans or other crops instead of spring wheat, which is seeded earlier in the season, analysts said.

 

Ten to 20 inches of snow, with a water equivalency of 2 inches to 6 inches, needs to melt before drying and pre-planting of spring wheat can begin, T-Storm Weather said. That probably won't happen until the last 10 days of April, resulting in "major pre-planting delays," according to the private weather firm.