May 5, 2007

 

US Wheat Review on Friday: Mostly up in quiet, consolidative trade

 

 

US wheat futures finished mostly higher Friday, managing to carve out modest gains in choppy, consolidative trade, analysts said.

 

July CBOT wheat ended 1/4-cent higher at US$4.94 3/4, July KCBT wheat settled 2 cents higher at US$4.85, and July MGE wheat finished 1 3/4-cents higher at US$5.20.

 

The absence of fresh market-moving news promoted a choppy, consolidative theme, with traders marking time ahead of the weekend, analysts said.

 

Two-sided trade was featured as traders took a cautious approach heading into the weekend, looking ahead to Monday's crop conditions report, analysts said.

 

Improved weather outlooks for the U.S. and Europe applied mild pressure, with expectations for Monday's crop progress report to show improved winter wheat crop rating and a pick up in spring wheat seeding generating light pressure as well, traders said. Nevertheless, end of the day position squaring enabled futures to end the session in positive territory, a CBOT floor broker added.

 

Meanwhile, the DTN Meteorlogix Weather Forecasts said the next five days, in general, will be wet for Southern Plains wheat areas. Thunderstorms through Sunday will cover most of the region, with rainfall ranging up to one and one-half inches, with locally heavier amounts. Additional showers and thunderstorms are possible during Monday through Wednesday, favoring Oklahoma and north Texas, but also possible in southern and eastern Kansas.

 

A few showers are headed for the northern half of Europe - England east through Poland - during the next five days. The rains will be beneficial, although not as significant as rain in southern France, Spain and Italy during this week. Major grain areas of Ukraine and Australia are dry and will remain so through most of next week. Australia had some good rains of more than one inch last week, but additional rainfall is needed. The dry situation in Ukraine continues an extended period of dry conditions going back to last winter, Meteorlogix reports.

 

In other news, analytical firm Informa Economics estimated 2007-08 U.S. all winter wheat production at 1.604 billion bushels, above the 1.298 billion bushels produced in 2006-07. Informa estimated hard red winter wheat production at 984 million bushels versus 2006-07 production of 682.1 million bushels. Soft red winter wheat production was estimated at 378 million bushels compared to 2006-07 production of 390.2 million bushels. The firm estimated white winter wheat production at 242 million bushels, compared to production of 225.8 million bushels in 2006.

 

In CBOT pit trades, Man Financial bought 500 July, with Fimat a seller of 400 July and Man Financial a seller of 200 July. Speculative funds were estimated net sellers on the day.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended higher in quiet trade, with the trade uninspired by crop tour results of private crop estimates from Informa, analysts said. The market was seemingly marking time ahead of the weekend, with intermarket spreads uneventful as well, a KCBT floor broker said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended mostly higher, experiencing light volume as well. The market was in a holding pattern Friday, unable to generate much interest, with traders content to sit on the sidelines ahead of the weekend, a MGE floor analyst said. Light hedge related activity was reported, but without fresh fundamental inputs, choppy, sideways trade prevailed, he added.