US Wheat Review on Thursday: Ends up on short-covering, slow seeding

 

 

Short-covering and fears that cool, wet weather will continue to delay U.S. spring wheat seeding pushed U.S. wheat futures higher Thursday.

 

Chicago Board of Trade July wheat jumped 12 3/4 cents to US$5.40 3/4 a bushel. Kansas City Board of Trade July wheat rose 13 1/2 cents to US$5.92, and Minneapolis Grain Exchange July wheat climbed 12 3/4 cents to US$6.52 1/4.

 

Traders are worried the weather will keep farmers out of their fields and that acres may shift to other crops from spring wheat, analysts said. Soybeans, corn and specialty crops like sunflowers can be planted in spring wheat areas of the northern Plains.

 

"They're just not getting any spring wheat planting done," said Tim Hannagan, analyst for Alaron. "It's a weather move right now."

 

Short-covering helped boost prices as speculative funds are net short in CBOT wheat, traders said. Commodity funds bought an estimated 4,000 contracts at the CBOT.

 

In other news, total weekly U.S. wheat export sales of 431,500 tonnes were considered solid, a CBOT floor trader said. Analysts had estimated sales would be 250,000 tonnes to 450,000 tonnes.

 

Nearby CBOT May wheat remains range-bound after bouncing from its recent lows, Hannagan said. The contract has traded within a range of roughly US$5 to US$5.60 for weeks. CBOT May wheat closed up 12 1/2 cents at US$5.29 1/4.

 

 

Kansas City Board of Trade

 

KCBT wheat felt spillover support from gains at the MGE, which led the upside for much of the day session, traders said. KCBT May wheat closed up 14 1/2 cents at US$5.84.

 

Warmth in the central and southern Plains this weekend should accelerate development of hard red winter wheat, T-Storm Weather said in a forecast. Heavy rain is expected Monday and Tuesday in Oklahoma and Texas, where wheat is thought to have suffered damage from an early April freeze, the firm said. The extent of the damage to the crop remains unclear.

 

The market may rally into the weekend amid ongoing worries about spring wheat planting, although profit-taking could add pressure, a trader said. KCBT July wheat closed above its 50-day moving average around US$5.82 3/4.

 

 

Minneapolis Grain Exchange

 

Cool, wet weather "will keep fieldwork and planting well behind the normal pace," according to Cropcast Agricultural Weather. Light showers are expected to fall over a large area during the next few days, the private weather firm said.

 

"It's all but certain that this rain is coming in, and it's going to keep planting at a minimum," Hannagan said.

 

It added support that deliverable supplies of hard red spring wheat at Duluth are considered tight, a spring wheat trader said. MGE May wheat climbed 15 1/2 cents to US$6.69.