May 6, 2008
US Wheat Review on Monday: Weakens on improved crop predictions
U.S. wheat futures closed weaker across the board Monday as traders anticipated improved crop conditions, an analyst said.
Chicago Board of Trade July wheat slipped 3 1/2 cents to US$8.05 1/2 per bushel. Kansas City Board of Trade July wheat lost 5 1/4 cents US$8.56 and Minneapolis Grain Exchange July wheat dropped 12 cents to US$9.45.
The futures market slipped because traders feel rains late last week boosted the condition of the crop, said Alaron analyst Tim Hannagan. The U.S. Department of Agriculture at 4 p.m. EDT will release its weekly crop progress report.
Wheat also looked to the neighboring corn market for direction during the session, traders said. CBOT corn ended sharply lower.
Commodity funds at the CBOT were seen as even.
Trading volume of CBOT July wheat was light; despite slipping, the contract closed above the bears' first technical support level of US$8.
Kansas City Board of Trade
The Kansas winter wheat crop's condition is prompting yield predictions close to 400,000 bushels, a Kansas City commodities broker said. Last year, Kansas produced 280,000 bushels.
But with dry conditions in western Plains states, "the market's having a hard time figuring out just what hard red winter wheat will be," said Kim Anderson, an Oklahoma State University agricultural economist.
U.S. hard red winter wheat should receive a boost from wetter conditions this week, T-storm Weather said.
Minneapolis Grain Exchange
Slipping interest in speculative trading echoed from the CBOT to the pits in Kansas City and Minneapolis, a MGE floor trader said. The "listless trading" was amplified by reduced hedging action as farmers in the northern Plains are busy planting spring wheat, he said.
The wheat markets are "about the slowest I've ever seen," the trader said.
T-storm Weather predicted "sluggish" spring wheat planting conditions to persist in the U.S., Canada, and Russian Federation.
