US Wheat Review on Wednesday: Rises on supportive outside markets, rebound

 

 

Supportive outside markets, technical buying and concerns about slow spring wheat planting lifted U.S. wheat futures Wednesday.

 

Chicago Board of Trade July wheat rose 10 cents to US$5.32 a bushel. Kansas City Board of Trade July wheat ended up 9 cents at US$5.81, and Minneapolis Grain Exchange July wheat jumped 13 3/4 cents to US$6.58 1/4.

 

Gains in equities and crude oil and a drop in the U.S. dollar helped boost wheat, traders said. A soft dollar makes U.S. grains more attractive to foreign buyers. CBOT soybeans and corn also ended sharply higher. Commodity funds bought an estimated 3,000 wheat contracts at the CBOT.

 

CBOT wheat, in particular, was a follower of the other markets, as it doesn't have a bullish fundamental story, a trader said. There are ample supplies of soft red winter wheat, used to make pastries and snack foods, and demand has been lackluster, he said.

 

The markets were due for a rebound after sliding Monday on fears that swine flu would reduce pork consumption and animal feed demand, analysts said. Worries about the impact of swine flu on grain use are easing a bit, although there is still uncertainty in the markets, they said.

 

"I think all the wheat's getting a respite from the emotional roller coaster that swine flu has created on the markets," a broker said.

 

Nearby CBOT May wheat ended up 10 1/4 cents at US$5.20 3/4. First notice day for May contracts is Thursday, and deliveries are expected to be 3,000 contracts to 5,000 contracts, analysts and traders said.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended on firm outside and neighboring markets, a floor trader said. Strength in stocks and crude oil and weakness in the dollar sent bullish signals to wheat, she said.

 

"Commodity-wide we were seeing a little bit of strength," the trader said.

 

First notice day deliveries against KCBT May wheat are not expected to be heavy, a trader said. Citigroup estimated deliveries at zero to 100 contracts.

 

 

Minneapolis Grain Exchange

 

Wet weather in the northern U.S. Plains and delayed spring wheat planting continue to support MGE wheat, traders said. Precipitation fell through the region Wednesday, but another rain event is not expected before Monday, meaning at least five days of drying should occur, according to a forecast from T-Storm Weather. However, coolness with low temperatures in the 30s Fahrenheit "occurs on many mornings through this weekend to limit topsoil drying and warming," the private weather firm said.

 

There were concerns about tight deliverable hard red spring wheat supplies ahead of first notice day, a trader said. MGE May wheat gained 16 cents to US$6.79. No deliveries are expected against the contract on first notice day, traders and analysts said.