US Wheat Review on Thursday: Up on spillover support, technical buying

 

 

Gains in other markets and weakness in the U.S. dollar solidly lifted U.S. wheat futures Thursday.

 

Chicago Board of Trade May wheat surged 25 cents to US$5.50 1/2 per bushel. Kansas City Board of Trade May wheat climbed 25 1/2 cents to US$5.91 1/2, and Minneapolis Grain Exchange May wheat rose 15 3/4 cents to US$6.59 1/4.

 

Strength in equities, crude oil and CBOT soybeans helped support wheat, said Doug Houghtonne, market analyst for Brock Associates. A drop in the dollar was seen as supportive because it makes U.S. wheat more attractive to foreign buyers.

 

"The dollar was down sharply," Houghtonne said. "That had a big supportive influence. There's just a general buy commodity attitude out there today."

 

Commodity funds bought an estimated 5,000 contracts at the CBOT, floor traders said. The rallies in other markets seemed to open the door for some short-covering, a trader said.

 

CBOT July wheat, which represents the new soft red winter wheat crop, faces technical resistance at last week's open outcry high of US$5.73, an analyst said. If the contract tops that level, more technical buying could come in, he said.

 

In other news, total weekly U.S. wheat export sales of 383,900 tonnes were within trade expectations of 250,000 to 450,000 tonnes.

 

 

Kansas City Board of Trade

 

Support from outside and neighboring markets boosted KCBT wheat, traders said. Wheat closed near session highs, with KCBT May wheat settling just below its open outcry high of US$5.93.

 

There are ongoing concerns about dryness in hard red winter wheat areas of the southwest U.S. Plains, Houghtonne said. However, other markets were the driving influence on prices, he said.

 

"I think it's mostly a lot of buying across the majority of the commodity markets," he said.

 

Rain chances across HRW wheat areas in the western Plains are "not ideal" over the next 10 to 14 days, beyond snowfall in Nebraska this weekend, T-Storm Weather said in a forecast. "That being said, a chance always exists given the active pattern over the next 10-14 days," the private weather firm said.

 

 

Minneapolis Grain Exchange

 

MGE May wheat trailed nearby CBOT and KCBT wheat futures contracts. The relationship was a departure from Wednesday, when MGE May wheat finished higher despite losses at the CBOT and KCBT.

 

Deferred MGE wheat contracts Thursday finished firmer than the nearby contract. MGE September wheat soared 21 1/2 cents to US$6.51 3/4. Deferred contracts closed lower Wednesday.

 

The market continues to monitor moisture in the northern U.S. Plains, where flooding is expected to delay spring fieldwork. The statewide average starting date for fieldwork in North Dakota is seen as April 29, two weeks behind last year's expected start date, according to the National Agricultural Statistics Service. The statewide five-year average starting date is April 16, it said.