US Wheat Review on Tuesday: Firm though weak corn, soy limit gains

 

 

U.S. futures markets closed slightly higher and near their daily lows in quiet trading. Gains in wheat were limited by weaker corn and soybean futures prices at the close.

 

July Chicago wheat closed down up 1 1/4 cents at US$5.52 1/4. July Kansas City wheat futures closed up 1 3/4 cents at US$5.98 3/4 a bushel. Minneapolis wheat futures closed up 6 cents a bushel at US$6.72 3/4.

 

"Wheat futures are being supported by spread unwinding with corn, along with light short covering," said a Midwest-based market analyst. "Gains are mostly corrective in nature as the fundamental outlook is negative amid plentiful domestic and global supplies." he added.

 

Indeed, cash basis levels for wheat in the U.S. remain at depressed levels. A lack of U.S. wheat export business is fully reflected in depressed CIF basis bids at ports in the Gulf of Mexico and in the Pacific Northwest. With 2008-2009 export inspections running 20% below year-ago levels, port premiums for all types of wheat delivered from the U.S. interior currently languish 20 to 80 cents a bushel below average levels.

 

Recent and forecast rain events across the southern U.S. plains states do favor the developing crop and will help it recover from freeze damage across Texas, Oklahoma and southern Kansas, said Meteorlogix weather. This also limited buying interest in wheat futures today, said Brian Hoops of Midwest Market Solutions.

 

The condition of the winter wheat crop improved marginally over the last week. USDA reported that as of Sunday, 47% of the winter wheat crop was rated good to excellent versus 45% last week. Fourteen percent of the crop is now rated very poor compared to 13% last week. USDA reported 27% of the winter wheat crop is headed, which is up 6% from a week-ago, but 8% behind normal. Only 3% of the Kansas wheat crop is headed, versus 25% on average.

 

 

Kansas City Board of Trade

 

Traders will be closely monitoring results from the Wheat Quality Council HRW tour, which started sampling fields in Kansas on Tuesday. Crop scouts on one leg of the annual U.S. hard red winter wheat tour Tuesday saw good-looking wheat with plenty of moisture and little disease pressure.

 

"This crop is wonderfully boring," said Jim Shroyer, Kansas State University extension agronomist. "There's no real surprises at this point."

 

Crop scouts on the tour, sponsored by the Wheat Quality Council, fanned out from Manhattan, Kan., Tuesday morning and had expected to see good-looking wheat.

 

 

Minneapolis Grain Exchange

 

The weekly crop progress reports issued Monday afternoon showed spring wheat planting progress continues to lag well behind the normal pace. USDA reported plantings at 23% complete, which is up 15% from last week but still well below the 55% complete figure from a year ago and the five-year average of 59%. "We took some premium out of spring wheat futures last week, thinking that planting progress would significantly improve, but there was not a whole lot of planting progress made last week," said Hoops of Midwest Market Solutions.