US Wheat Review on Thursday: Falls on world supply, lack of spillover

 

 

A lack of spillover support from other markets and bearishness about ample global supplies drove U.S. wheat futures to close lower for the fourth consecutive day Thursday.

 

Chicago Board of Trade May wheat sank 10 cents to US$5.22 a bushel. Kansas City Board of Trade May wheat fell 9 1/2 cents to US$5.70 1/2, and Minneapolis Grain Exchange May wheat tumbled 12 1/4 cents to US$6.44 1/2.

 

The U.S. Department of Agriculture's April supply/demand report was generally considered neutral for wheat, although an increase in its estimate for global ending stocks was bearish, an analyst said. The U.S. has struggled on the world export market lately amid plentiful global supplies and competition from other countries.

 

The USDA raised its estimate for 2008-09 world wheat carryout to 158.1 million tonnes from its March estimate of 155.85 million. The USDA estimated U.S. wheat carryout at 696 million, compared to the average analyst estimate of 697 million and the USDA's March estimate of 712 million.

 

"Look at the world stocks. We're up again," said Joe Victor, vice president of marketing for Allendale. "There is enough wheat out there."

 

CBOT May wheat hit an open outcry session high of US$5.42 and closed near its session low of US$5.21. Commodity funds sold an estimated 4,000 contracts at the CBOT.

 

CBOT May wheat ended down 41 1/2 cents on the week. The CBOT, KCBT and MGE are closed Friday in observance of Good Friday.

 

 

Kansas City Board of Trade

 

KCBT May wheat closed at its session low after hitting an open outcry session high of US$5.91 in early dealings. The contract ended down 37 cents on the week.

 

It was bearish that the U.S. dollar, which was weaker in early activity, traded higher by the end of the session, a trader said. A firm dollar is seen as bearish because it makes U.S. wheat less attractive to foreign buyers.

 

Strength in CBOT soybeans helped boost wheat in early dealings, but the spillover support faded as soy trimmed gains, traders said. Nearby May soybeans closed up 1 cent at US$10.07 after hitting an open outcry session high of US$10.28.

 

 

Minneapolis Grain Exchange

 

MGE wheat finished weaker despite lingering concerns about potential spring wheat planting delays due to excessive wetness in the northern U.S. Plains. MGE May wheat closed down 27 cents on the week.

 

A weak storm system should move across the northern Plains and Corn Belt during the middle of next week, according to a forecast from T-Storm Weather. The best chances for 1/4 inch to 1/2 inch of moisture focus on the northwest Corn Belt and Dakotas, "where it will have been dry for a lengthy period," the private weather firm said. The new round of precipitation "simply keeps the Dakotas too wet," T-Storm said.