US Wheat Review on Thursday: Futures up on crop outlooks, technical strength

 

 

U.S. wheat futures ended higher Thursday, climbing on bullish crop outlooks and technical strength.

 

July CBOT wheat ended 11 1/2 cents higher at US$5.70 1/4, July KCBT wheat settled 6 3/4 cents higher at US$6.13 3/4, and July MGE wheat finished 8 1/4 cents higher at US$6.86 1/2.

 

Reports of poor winter wheat yields in the southern plains, average yields found in the No. 1 wheat producing state of Kansas coupled with lingering planting delays in the spring wheat belt provided the fundamental support to keep sellers on the run, traders said.

 

The U.S. winter wheat crop tour is finding only average yields in Kansas, and that sends a message to the market that there will be only a limited ability to offset the crop losses in Oklahoma and Texas, said Shawn McCambridge, senior grains analysts at Prudential Bache in Chicago.

 

Technical momentum aided the bullish tonnee as did outside market support for most of the day, reducing risk to traders playing the buy side of the market, analysts said.

 

JP Morgan said in a monthly outlook Thursday that the market does have fundamental support, with smaller production and rising export demand likely to boost both hard red winter and hard red spring wheat.

 

Speculative fund buying in CBOT wheat was estimated at 5,000 lots.

 

The 2009 Kansas hard red winter wheat crop is expected to have an average yield of 40.8 bushels per acre, according to figures released Thursday from the Wheat Quality Council's annual hard winter wheat tour. The average of tour participants' estimates puts the Kansas HRW wheat production at 333.3 million bushels.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said in the Northern Plains crop areas, episodes of mostly light rain will continue to keep planting progress slow, especially in North Dakota and northern Minnesota. Wheat tours in the Southern Plains are finding significant indications of weather damage to this year's crop due to drought and freeze problems. Kansas production is estimated to be less than the 2008 output, and Oklahoma's crop is now pegged at less than half its 2008 total, Meteorlogix added.

 

Weekly net export sales totaled 386,300 metric tonnes for the week ended April 30, the U.S. Department of Agriculture said Thursday. Analysts had expected sales between 200,000 and 450,000 metric tonnes. Sales had totaled 251,200 tonnes the previous week.