US Wheat Review on Monday: Ends mixed in technically led trade

 

 

U.S. wheat futures closed mixed Monday after the markets traded both sides in technically led activity, analysts said.

 

Chicago Board of Trade May wheat edged up 1 1/4 cent to US$5.23 1/4 a bushel. Kansas City Board of Trade May wheat slipped 1/2 cent to US$5.70, and Minneapolis Grain Exchange May wheat fell 6 1/4 cents to US$6.38 1/4.

 

There was a lack of fresh fundamental news for the markets, traders said. Some short-covering seemed to boost CBOT wheat, they said.

 

Non-commercial speculative funds cut short CBOT wheat futures and options positions by 6,223 contracts in the week ended April 7, according to a supplemental Commitment of Trades report from the Commodity Futures Trading Commission. That left them net short 32,260 contracts, it said.

 

"I think it was more technical than anything," said Tom Leffler, owner of Leffler Commodities.

 

Bearishness about ample global wheat supplies continued to weigh on prices, traders said. The U.S. has struggled to win unexpected export demand lately due to stiff competition from other countries with plenty of wheat to sell.

 

"As long as we don't lose a lot of production in the U.S., we're going to have a hard time maintaining any strength because we're going to have enough of wheat that we're going to be ok," Leffler said.

 

 

Kansas City Board of Trade

 

KCBT wheat closed slightly lower amid some talk about beneficial rains that fell in the hard red winter wheat belt during the weekend, a trader said. The belt was "helpfully wetter than expected" Sunday and could see more rain later this week, according to a forecast from T-Storm Weather.

 

The USDA is expected to lower its U.S. winter wheat condition rating, particularly for HRW wheat, in its weekly crop progress report, due out at 4 p.m. EDT, analysts said. The weekend rains are "going to help later on this week, not so much immediately," Leffler said. Last week, 43% of winter wheat was rated good to excellent.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside in what was seen as a correction of inter-market spreads, a market analyst said. Nearby May wheat recently has built a solid premium over CBOT and KCBT wheat on worries that excessive wetness will delay spring wheat plantings in the northern U.S. Plains.

 

"We've become significantly overextended compared to where we were two weeks ago," he said.

 

Short-covering or fund buying at the CBOT and KCBT wouldn't have as much of an impact at the MGE, the analyst added. Speculative funds aren't as involved in trading at MGE, the smallest of the three U.S. wheat exchanges. Farmer selling was light, a trader said.