US Wheat Review on Monday: Pulls back on pressure from outside markets

 

 

Profit-taking and bearish signals from outside markets drove U.S. wheat futures lower Monday.

 

Chicago Board of Trade May wheat lost 6 1/2 cents to US$5.57 a bushel. Kansas City Board of Trade May wheat slipped 4 1/2 cents to US$6.03, and Minneapolis Grain Exchange May wheat shed 2 1/4 cents to US$6.69 1/4.

 

Wheat pulled back after climbing Friday and closing with solid gains on the week. There was some "re-positioning" Monday after last week's strength and ahead of the release of the U.S. Department of Agriculture's first national crop progress report of the year, said Dave Marshall, an independent marketing adviser and commodity broker.

 

Traders want to know how much U.S. winter wheat has developed amid worries about potential damage from cold weather, he said. The report is due out at 4 p.m. EDT.

 

Losses in crude oil and equities and strength in the U.S. dollar added to the bearish tonnee, traders said. Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower on profit-taking and pressure from outside markets, traders said. Weather will give the market direction tomorrow as traders assess the impact of cold temperatures and the threat of crop damage, Marshall said.

 

Cold weather Tuesday morning will cause "wheat to fall below freezing, but we do not believe a major winter kill event will occur," T-Storm Weather said in an update to its daily forecast. A hard spring freeze Easter weekend last year hurt crops that were farther along in the development process.

 

"Everybody's watching the weather maps, [wondering] where is this cold weather going to go?" Marshall said. "The memories of that Easter freeze from 2007 are still pretty clear in traders' minds."

 

 

Minneapolis Grain Exchange

 

MGE wheat closed slightly lower but resisted heavier losses seen at CBOT and MGE. There continue to be concerns that cold, wet weather may delay spring wheat plantings in the northern U.S. plains.

 

"North Dakota and Manitoba spring wheat planting delays are likely due to snow pack," T-Storm Weather said.

 

A year ago, 5% of the spring wheat crop was planted in six main states, according to USDA crop progress data. That compared to a five-average of 6%.