April 25, 2008

 

US Wheat Review on Thursday: Sinks on upcoming harvest, lack of news

 

 

U.S. wheat futures stumbled Thursday on a lack of fresh bullish news, with the markets focusing on bearish expectations for the upcoming harvest in the Northern Hemisphere, analysts said.

 

Chicago Board of Trade July wheat fell 7 1/2 cents to US$8.24 per bushel. Kansas City Board of Trade July wheat slipped 3 1/2 cents to US$8.769, and Minneapolis Grain Exchange July wheat sank 20 cents at US$9.54 3/4.

 

Expectations that the world will produce a big wheat crop in the approaching winter wheat harvest continued to weigh on prices, traders said. Producers worldwide are thought to have expanded seedings due to high prices.

 

A general sell-off in commodities added pressure to wheat, traders said. CBOT corn and soybeans were on the defensive, along with outside markets like gold and crude oil. Commodity funds sold an estimated 2,000 wheat contracts at the CBOT.

 

Technically, wheat looks to be in an oversold condition, said Tom Leffler, owner of Leffler Commodities. CBOT July wheat, which represents the new crop, has shed US$4.48 3/4 since its high last month.

 

"It's due to bounce," Leffler said. "Fundamentally, it's a little tough to really get (bullish about) this market. As long as we don't have any serious problems with the crop, I think we're going to see a lower price come harvest."

 

 

Kansas City Board of Trade

 

Spillover pressure weighed on KCBT wheat futures amid an absence of major weather scares for the Northern Hemisphere, a KCBT floor trader said. The market couldn't ignore strength in the dollar or a sharp setback in gold, she said.

 

"Today, if anything, we've got to look at outside markets," the trader said. "We're just kind of at the wayside until some real tangible weather news comes in."

 

In general, wheat moisture conditions are improving, DTN Meteorlogix said in a forecast. However, the southwestern Plains and Texas Panhandle continue to be dry and in need of moisture, the private weather firm said.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside. Losses in the other wheat markets and the weaker tonnee in commodities were bearish influences, a MGE floor trader said.

 

Weekly U.S. wheat export sales were within trade estimates and didn't attract a lot of interest, the trader said. In other export news, Japan said it bought 86,000 tonnes of wheat, including 20,000 tonnes of U.S. dark northern spring wheat and 20,000 tonnes of semihard wheat, in a routine tender.