April 30, 2008

 

US Wheat Review on Tuesday: Falls, following corn

 

 

A retreat from Monday's gains pushed U.S. wheat futures into negative territory Tuesday, floor traders said.

 

Chicago Board of Trade July wheat dropped 32 1/2 cents to US$8.08 1/2 cents a bushel. Kansas City Board of Trade July wheat fell 23 3/4 cents to US$8.48 and Minneapolis Grain Exchange July wheat fell 31 cents to US$9.37.

 

Wheat pulled back amid a setback in the CBOT corn market. Wheat recently has been looking to corn for direction.

 

Traders say the market still has room to react bullishly to potential cold-related crop damage, but no such pressure is imminent.

 

Soft and hard winter wheat could be exposed to freezing temperatures, but the cold, wet spring has delayed crop progress to the point where freezing temperatures would not affect yields at this point, said Mike Palmerino, senior agricultural meteorologist at DTN.

 

"Indications are it's going to be colder this weekend," he said. "But the only way you'd hurt wheat is if it's heading out."

 

Still, anxiety over cold weather will likely cause traders to cover some short positions before the weekend, one analyst said.

 

 

Kansas City Board Of Trade

 

A break in CBOT corn added pressure to KCBT wheat futures, a floor trader said. There was a lack of other supportive news.

 

"Wheat left to its own devices is kind of weak," a KCBT floor trader said. "The only thing holding it up was corn. If corn goes down, wheat has nothing to hold it up."

 

 

Minneapolis Grain Exchange

 

Trading was light in Minneapolis, but lower prices have encouraged more "country selling" as producers gave up on the return of high prices, one trader said.

 

The spread between the May and July contracts widened as short-covering activity preceded first notice day Wednesday, one trader said. He added he did not expect to see any deliveries Wednesday against the MGE May futures.