US Wheat Review on Monday: Falls on swine flu fears, profit-taking

 

 

U.S. wheat futures closed lower Monday on fears swine flu may cut demand for agricultural products, although the outbreak may not have a long-term impact on markets, analysts said.

 

Chicago Board of Trade July wheat tumbled 23 3/4 cents to US$5.19 1/2 a bushel. Kansas City Board of Trade July wheat sank 22 cents to US$5.71 1/2, and Minneapolis Grain Exchange July wheat slid 9 1/2 cents to US$6.41 1/2.

 

Prices fell as traders digested news of the flu outbreak and worried it could reduce demand for pork and animal feed, analysts said. People cannot contract swine flu from eating pork but may cut consumption out of fear, an analyst said.

 

"It's an emotional game," said Dale Durchholz, analyst for AgriVisor. "It's all exaggerated arguments, but that's normal when you're in the midst of something that's somewhat unknown."

 

Jitters about the flu could influence the markets through the middle of the week as traders wrap their arms around the situation, Durchholz said. CBOT corn and soybeans closed lower with wheat.

 

Commodity funds sold an estimated 4,000 wheat contracts at the CBOT. CBOT July wheat closed near its open outcry session low of US$5.18.

 

Weather continued to look supportive for U.S. wheat, particularly for spring wheat in the northern U.S. Plains, a CBOT floor analyst said. MGE spring wheat futures recently have lent support to the other markets.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower as reports of swine flu made market participants "edgy," an analyst said. KCBT July wheat closed just above its session low of US$5.71.

 

Condition ratings for hard red winter wheat are expected to be slightly better in U.S. Department of Agriculture's weekly crop progress report, due out at 4 p.m. EDT, following rains last week in the southern U.S. Plains, an analyst said. A week ago, the USDA rated 43% of the total winter wheat crop as good to excellent.

 

In other news, weekly U.S. wheat export inspections of 12.142 million bushels were below trade expectations. Analysts had expected inspections of 14 million to 19 million.

 

 

Minneapolis Grain Exchange

 

MGE wheat was underpinned by ongoing spring wheat planting delays caused by cool, wet weather, traders said. Seeding should remain sluggish in the northern U.S. Plains for the next 10 to 14 days, T-Storm Weather said in a forecast.

 

Seeding should be 17% to 22% complete in weekly crop progress report, traders said. A week ago, planting was 6% complete, below the average of 21%, according to the USDA.

 

MGE wheat briefly crawled into positive territory during the day session. MGE July wheat hit a session low of US$6.36 1/2 and a session high of US$6.55.