April 14, 2008

 

US Wheat Outlook on Monday: Seen stronger on overnight, spillover

 

 

U.S. wheat futures are poised to start Monday's day session higher in a rebound from losses Friday and on spillover support from neighboring markets, traders said.

 

Benchmark Chicago Board of Trade May wheat is called to open 10 to 15 cents per bushel higher. In overnight electronic trading, CBOT May wheat gained 12 3/4 cents to US$9.09 1/4.

 

Wheat is bouncing back a bit after sliding Friday on end-of-the-week profit-taking, traders said. Strength in CBOT soybeans and corn also should lend support as wheat has largely turned into a follower of the other markets, an analyst said.

 

Corn and soybeans are still battling over acreage in the U.S., while winter wheat, traded at the CBOT and Kansas City Board of Trade, was planted last fall. Growers are in the process of seeding spring wheat, traded at the Minneapolis Grain Exchange, in the northern U.S. Plains.

 

Traders will receive an update on plantings and on the condition of winter wheat Monday afternoon in the U.S. Department of Agriculture's weekly crop progress report. The USDA will issue the report at 4 p.m. EDT.

 

"Precipitation that occurred last week will help improve the condition of wheat" in the central and southern Plains, DTN Meteorlogix said. "However more rain is still needed, especially in the west."

 

In the Delta, a widespread frost and freeze is expected Monday night, Meteorlogix said. Any heading or flowering wheat could be at risk in areas where the lows fall below freezing, the private weather firm said.

 

Recent rain in Europe will help recharge soil moisture through Spain, especially west and central locations, Meteorlogix said. Shower activity appears to be picking up across the North China Plain, which should boost the condition of jointing wheat crop, according to the firm.

 

Wheat prices in China were mostly stable in the week to Monday, with flour mills stockpiling on expectations of higher prices later in the year. Wheat prices in Henan province, the biggest producing region, were RMB1,520-RMB1,540 a metric tonne, little changed from a week earlier.

 

In other news, Argentina has extended the closure of wheat exports for shipments before May 5. The government previously said wheat exports would be opened again starting April 21, but it has refused to accept export declarations due to domestic supply problems brought on by a 21-day farm strike last month.