US Wheat Review on Tuesday: Bounces with support from slow seeding

 

 

U.S. wheat futures edged higher Tuesday in a modest rebound from losses, with Minneapolis Grain Exchange wheat finding support from planting worries, traders said.

 

Chicago Board of Trade July wheat rose 2 1/2 cents to US$5.22 a bushel. Kansas City Board of Trade July wheat finished 1/2 cent higher at US$5.72, and MGE July wheat closed up 3 cents at US$6.44 1/2.

 

The market bounced after tumbling Monday on fears swine flu would reduce animal feed demand. There are still jitters about the flu outbreak amid uncertainty about its impact on consumption, an analyst said.

 

"I think a lot of people are still nervous about the swine flu situation," he said. "I think that's keeping some bullish traders out of the wheat market."

 

Wheat could extend its rebound Wednesday but may have a tough time rallying in front of first notice day Thursday, an analyst said. First notice day is the first day on which notices of intention to deliver actual commodities against futures-market positions can be received. "Some" deliveries are expected, the analyst said.

 

"We've taken a hit in that wheat market," he said. "I think we can work our way back up."

 

Commodity funds bought an estimated 3,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat finished slightly higher following a session that was "kind of uneventful," a broker said. There was talk about moisture in hard red winter wheat areas of the U.S. central and southern Plains, which is seen as "positive" for the crop, he said.

 

The U.S. Department of Agriculture rated 45% of the total U.S. winter wheat crop as good to excellent as of Sunday, up two percentage points from the previous week. The increase was largely expected.

 

"The wheat's really growing out here," the Kansas-based broker said. "We've got good moisture. We've got a warming trend. That's ideal for what we need for the wheat."

 

 

Minneapolis Grain Exchange

 

MGE wheat led the upside on ongoing planting delays in the northern U.S. Plains, an analyst said. Cool, wet weather has kept producers out of their fields for weeks, although drier weather later this week could be beneficial for planting, a trader said.

 

Still, portions of the Northern Plains and adjacent areas of the Canadian Prairies are forecast to become "quite wet" Tuesday night and Wednesday, with unseasonably heavy totals of 3/4 inch to 1 1/4 inches in much of Montana, northwest North Dakota, southeast Saskatchewan and southern Manitoba, according to T-Storm Weather. The remainder of the Dakotas is expected to receive less than 1/2 inch, the private weather firm said.

 

There are lingering concerns about tight deliverable supplies of hard red spring wheat. Nearby MGE May wheat closed up 4 3/4 cents at US$6.63.