US Wheat Review on Wednesday: Closes lower for 3rd consecutive day

 

 

U.S. wheat futures closed lower Wednesday for the third consecutive session as technical and fund selling erased earlier gains.

 

Chicago Board of Trade May wheat closed down 7 3/4 cents at US$5.32 a bushel. Kansas City Board of Trade May wheat fell 10 cents to US$5.80, and Minneapolis Grain Exchange May wheat sank 5 cents to US$6.56 3/4.

 

The markets backpedaled after temporarily trading higher as traders squared positions before the release of the U.S. Department of Agriculture's April supply and demand report, an analyst said. The report is due out at 8:30 a.m. EDT Thursday.

 

CBOT May wheat hit an open outcry session low of US$5.31, its lowest price since April 1. Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

There are concerns about yield losses from a freeze in hard red winter wheat areas of the U.S. southern Plains, which should support prices, a CBOT floor analyst said. However, demand remains sluggish, which is bearish, he said.

 

Iraq bought 250,000 tonnes of wheat, including 100,000 tonnes from the U.S., but U.S. wheat is still priced too high to be competitive on the global market, the analyst said. The USDA is slated to issue its weekly export sales report at 8:30 a.m. EDT Thursday.

 

 

Kansas City Board of Trade

 

Technical selling dragged down KCBT wheat in front of the USDA report, a trader said. Market participants were cautious going into the report and ahead of the three-day Easter weekend, he said.

 

There is uncertainty about the extent of damage from the freeze in the HRW wheat belt and it will take time to assess the damage, traders said. Rain is expected to fall in the belt this weekend, which could help the crop recover, according to forecasts.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the upside at times during the day session and closed with the most modest losses on the day. MGE wheat continues to increase its premium over the other markets amid concerns about potential spring wheat planting delays from wetness in the northern U.S. Plains, an analyst said.

 

The USDA report should not provide major fireworks for the market, a trader said. The average of analysts' estimates for 2008-09 U.S. wheat carryout is 697 million bushels, down from the USDA's March estimate of 712 million, according to a Dow Jones Newswires survey of 13 analysts.