April 5, 2006

 

US Wheat Review on Tuesday: Mostly up; minneapolis grain exchange leads on lingering report

 

 

U.S. wheat futures ended mostly firm on Tuesday, with Minneapolis Grain Exchange wheat futures leading on lingering support from last Friday's U.S. Department of Agriculture estimate of a 1% drop in U.S. spring wheat acres and light intermarket spreading, brokers say.

 

Kansas City Board of Trade hard red winter wheat futures settled mixed Tuesday as early commission house buying succumbed to fund rolling of May positions into July, they noted.

 

First notice day for the three U.S. May wheat futures contracts is Friday, April 28.

 

At the Chicago Board of Trade, late buying of May by ABN Amro of about 700 May and by ADM offset late sales of about 1,000 May by Fimat to allow a firm close.

 

CBOT agricultural open outcry trade was halted for 39 minutes at 11:41 a.m. EDT Tuesday due to technical problems with the CBOT's data feed.

 

CBOT May wheat ended up 3/4 cent at US$3.42 3/4 while July wheat closed up 1 cent at US$3.56 per bushel.

 

Speculative funds ended Tuesday's open outcry session about net even, leaving the estimated fund stance net short about 3,400 CBOT wheat futures, brokers said.

 

Midday spot U.S. HRW Gulf barge bids rose 2 cents while SRW bids were flat Tuesday, cash sources said.

 

Futures traders said Monday's USDA report that the U.S. winter wheat crop was 38% in good-to-excellent condition was anticipated. Most traders thought the rating would rise next week due to good recent rains.

 

Still, they noted the current U.S. wheat crop condition was well below last year's 68% and the 10-year average of 54%. They also said it, and projected demand ideas, highlighted the reason new-crop high-protein KCBT wheat was trading at such a premium to lower-protein CBOT wheat.

 

Thirty-one percent of the U.S. winter wheat crop was in very poor to poor shape as of Sunday, the USDA said.

 

Among key U.S. hard red winter wheat producing states, Kansas' crop was 38% in good to excellent versus last year's 74% in that shape; Oklahoma's crop was 11% in good, with none of the crop in excellent, shape versus last year's 70%; and Texas' crop was 7% in good to excellent versus last year's 69%.

 

Meanwhile, Illinois' (SRW) wheat crop was 76% in good to excellent versus last year's 61%; Arkansas' crop was 67% in good to excellent versus last year's 42% in that shape; and Ohio's crop was 73% in good to excellent versus last year's 66%.

 

In global wheat news, Japan said it wouldn't seek wheat in a weekly tender this week while Jordan's buy tender for 50,000 tonnes of hard wheat closes April 12.

 

 

Kansas City Board of Trade

 

KCBT May wheat closed Tuesday down 3/4 cent at US$4.14 1/4, while KCBT July also settled down 3/4 cent at US$4.18 1/2.

 

Spot cash 11% and 12% U.S. hard red wheat basis bids were down 3% and 1%, respectively; while bids for 13% and 14% HRW were both down 1 cent, according to the KCBT.

 

KCBT deliverable HRW supplies in exchange-approved elevators for the week ended March 31 fell 535,000 bushels from the previous week to 5.360 million. The tally lagged last year's 5.788 million bushels.

 

Hutchinson deliverable HRW wheat stocks fell 64,000 bushels to 8.461 million bushels, well above the previous year's 3.432 million bushels.

 

 

Minneapolis Grain Exchange

 

MGE May wheat settled Tuesday up 3 cents at US$4.05 1/2 per bushel, with support seen at US$4.00, the top of a chart gap left on Friday's after USDA's surprisingly low U.S. 2006 other-spring-wheat acreage estimate of 13.9 million acres.

 

Durum plantings were expected to drop 34% from last year to total 1.83 million, the USDA said Friday.

 

MGE July wheat also ended up 3 cents Tuesday at US$4.11 1/4 per bushel.

 

"Trade is just really light, with some intermarket spreading including buying Minneapolis (wheat) and selling other markets," one MGE broker said at midday. "The chart doesn't look that great. We still have a small gap left to fill below the market."

 

He noted that media reports of high water in North Dakota were not that big of a factor in Tuesday's firm trade; however, forecasts call for more rain this week across the key U.S. spring wheat producer.

 

The USDA reported Monday that 2% of the U.S. spring wheat crop had been planted versus last year's 4% and the average of 3%.

 

Cash spring wheat basis bids were steady to up 10 cents Tuesday, cash sources said. Tuesday's Minneapolis wheat receipts totaled 91 railcars versus last year's 66 railcars. There were 43 durum receipts versus last year's 26 railcars, the exchange said.

 

MGE deliverable HRS wheat stocks, for Minneapolis and Duluth combined, totaled 19.20 million bushels for the week ended March 31, above the previous week's 18.9 million bushels but below the previous year's 23.81 million.