US Wheat Review on Thursday: Markets follow CBOT soybeans higher

 

 

A rally in Chicago Board of Trade soybean futures dragged U.S. wheat futures higher Thursday, despite bearish demand news.

 

Chicago Board of Trade May wheat jumped 9 1/2 cents to US$5.24 3/4 a bushel. Kansas City Board of Trade May wheat closed up 10 cents at US$5.70, and Minneapolis Grain Exchange May wheat rose 7 cents to US$6.34 1/4.

 

Nearby May soybeans ended up more than 20 cents on bullishness about South American production problems and strong Chinese demand for U.S. soybeans. As prices rose, buying spilled over into wheat, traders said.

 

"I think we're still a follower of soybeans," said Dave Marshall, an independent marketing advisor and commodity broker. "Soybeans are the leader in the commodity markets, and everything else is kind of the weak link."

 

Demand for wheat was not supportive, as Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, or GASC, snubbed the U.S. in a tender. Egypt booked 175,000 tonnes of Russian and French wheat.

 

Total weekly U.S. wheat export sales of 310,500 tonnes were at the low end of trade expectations. U.S. wheat is seen as priced too high to be competitive on the world export market.

 

"We haven't won much business from Egypt on those spot tenders really in quite some time," Marshall said. "I think we've been accustomed to not winning that Egypt business."

 

Moving forward, wheat will keep an eye on soybeans and on conditions of U.S. winter wheat, analysts said. Excessive rain would be unfavorable for soft red winter wheat in the heading stage of development in southern states, Marshall said.

 

 

Kansas City Board of Trade

 

KCBT wheat rose in light trading on borrowed strength from CBOT soybeans, a floor trader said. There was a lack of fresh bullish news to underpin the market, he said.

 

"We were just leaning on the beans unfortunately," he said. "We had real thin volume today, so there wasn't a lot to go on."

 

The central and southern Plains are expected to see "unseasonably heavy rains" through Saturday, which should be beneficial for hard red winter wheat, T-Storm Weather said in a forecast. The western half of the region will be the wettest, with amounts mostly from 1 inch to 1.5 inches, according to the private weather firm. Locally higher totals of more than 3 inches are probable, it said.

 

 

Minneapolis Grain Exchange

 

Soybeans were the main supportive factor for wheat, traders said. The strength in beans limited selling interest in wheat, they said.

 

Some showers are forecast over South Dakota during the next few days, but the spring wheat region will largely miss the major storm system expected to bring heavy rain to the south, T-Storm said. Still, pre-planting and planting should remain "limited" across North Dakota and northern Minnesota as rapid snow melt during the past week kept soils wet, the firm said.