April 18, 2008

 

US Wheat Review on Thursday: Markets slump on profit-taking pullback

 

 

Profit-taking drove U.S. wheat futures lower Thursday amid a lack of fresh bullish news, analysts said.

 

Chicago Board of Trade May wheat closed down 11 1/2 cents at US$9.13 per bushel. Kansas City Board of Trade May wheat fell 11 1/4 cents at US$9.73 3/4, and Minneapolis Grain Exchange May wheat was down 6 cents at US$12.39.

 

The markets pulled back after rallying Wednesday amid an absence of new inputs, traders said. There also was a lack of strong spillover support, as CBOT corn and soybeans were on the defensive for much of the session, they said.

 

Looking forward, traders will watch the weather amid nervousness about the potential for a damaging spring freeze, an analyst said. Expectations for a big global winter wheat crop continue to be a bearish factor in the back of traders' minds as well, he said.

 

"World wheat production prospects continue to look more bountiful in 2008 than a year ago," DTN Meteorlogix said.

 

Activity in neighboring and outside markets should also continue to be an influence on wheat, an analyst said. Commodity funds sold an estimated 1,000 contracts at the CBOT.

 

"If we see a decent correction in crude oil, I think you could see a decent correction in a lot of commodities, including the grains," the analyst said.

 

 

Kansas City Board of Trade

 

KCBT wheat futures slumped in a setback from Wednesday's rally, a floor trader said. Chatter about a possible cold snap in the U.S. Plains at the end of the month eased up, so the market gave back its gains, he said.

 

T-Storm Weather said in a forecast that it appeared that the coldest weather in the Plains from April 26-28 will stay north of major wheat areas. Favorable rain showers should continue in the Southern Plains hard wheat areas, bolstering soil moisture for the developing crop, Meteorlogix said.

 

 

Minneapolis Grain Exchange

 

Nearby MGE May wheat was weaker at the close, although the July and September contracts ended with modest gains. Spreading weighed on the front-month contract, along with the rolling of some positions, an analyst said.

 

A major snowstorm is probable for portions of eastern Montana and spring wheat areas of Canada this weekend and early next week, T-Storm Weather said. Rain should occur to the east, with the end result being a helpful boost of soil moisture, the weather firm said.