US Wheat Review on Wednesday: Sags on lack of spillover, soft demand

 

 

U.S. wheat futures sagged Wednesday on a lack of spillover strength, sluggish export demand and fund selling.

 

Chicago Board of Trade May wheat fell 7 cents to US$5.15 1/4 a bushel. Kansas City Board of Trade May wheat shed 4 1/2 cents to US$5.60, and Minneapolis Grain Exchange May wheat slipped 2 1/2 cents to US$6.27 1/4.

 

Soybeans, which have "helped put a floor underneath wheat prices," closed mixed after trading both sides, said Dale Durchholz, analyst for AgriVisor. CBOT corn also ended lower.

 

Commodity funds sold an estimated 3,000 wheat contracts at the CBOT.

 

Ample world wheat ending stocks and lackluster export demand for U.S. wheat are seen as bearish fundamentals, analysts said. U.S. wheat has been priced too high to be competitive on the global export market, they said.

 

"You've got a fundamental problem with the old crop in that we're still being undercut in the world arena," Durchholz said.

 

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, issued a tender for wheat after the close of trading, according to a report. It could help boost prices if GASC books U.S. wheat Thursday, a trader said.

 

AgResource Co. on Wednesday said "the spread between Black Sea values and the U.S. [soft red winter wheat] Gulf are getting closer to parity." SRW wheat, used to make pastries and snack foods, is traded at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat did not have strong direction and closed weaker as soybeans faltered, a trader said. Rain expected in the U.S. hard red winter wheat belt should improve crop conditions and was seen as bearish, analysts said.

 

T-Storm Weather said in an update to its daily forecast that "impressive rainfall is likely to end dryness across concentrated hard red winter wheat" areas. Totals of 3/4 inch to 1 3/4 inches are expected for much of western Nebraska, eastern Colorado, western Kansas, western Oklahoma, and western Texas, the private weather firm said.

 

There is still some uncertainty about potential damage to HRW wheat, used to make bread, from a freeze last week, said Louise Gartner, analyst for Spectrum Commodities. However, cool, wet weather has been ideal to help the crop recover, she said.

 

 

Minneapolis Grain Exchange

 

Weather looks drier in the northern Plains next week, which is seen as bearish for MGE wheat after excessive wetness raised concerns about delayed planting, an analyst said. T-Storm Weather said milder weather next week would be followed by a cool front with a round of rainfall across the northern Plains, but it noted the forecast is "questionable."

 

The U.S. Department of Agriculture on Thursday will issue weekly export sales data. U.S. wheat export sales for the week ended April 9 are expected to be 300,000 tonnes to 650,000 tonnes.