US Wheat Review on Monday: Mixed ahead of USDA data; watching money flows

 

 

U.S. wheat futures closed mixed Monday as traders moved to the sidelines ahead of government crop reports, with money flows into the markets seen as an underlying feature, traders said.

 

Chicago Board of Trade July wheat slipped 1/4 cent to US$5.90 3/4 a bushel. Kansas City Board of Trade July wheat rose 1 cent to US$6.34, and Minneapolis Grain Exchange July wheat slipped 2 1/2 cents to US$6.97 1/2.

 

Prices ended mixed amid a "lack of commitment" among traders in front of U.S. Department of Agriculture supply/demand and production reports due at 8:30 a.m. EDT Tuesday, said Jason Britt, president of Central State Commodities. There was some positioning and a "wait-and-see" attitude in the markets ahead of the release of estimates on ending stocks and output, he said.

 

There was an underlying feature of speculative money flows at the CBOT and KCBT, a trader said. Short covering that boosted CBOT wheat last week looks as though it will continue this week, he said.

 

"It's more technical related than anything at this point," an analyst said. "We kind of almost seemed like we changed market sentiment a little bit last week."

 

Non-commercial speculative funds cut their net short position in CBOT wheat to 29,526 contracts as of May 5 from 43,351 contracts as of April 28, according to a supplemental Commitments of Traders report from the Commodity Futures Trading Commission.

 

 

Kansas City Board of Trade

 

KCBT wheat ended slightly higher on technical buying, traders said. There continues to be chatter about crop losses in Oklahoma and Texas due to drought and freeze damage, they said.

 

Winter wheat production will be a main focus of the USDA reports Tuesday for the wheat markets, an analyst said. The crop is far enough along that traders are starting to get a "decent feel" about what production will be, he said.

 

The average production estimate among 10 surveyed analysts for all winter wheat production was 1.526 billion bushels. That is down from 1.868 billion bushels in 2008.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside during the day session amid a lack of speculative interest in the spring wheat market, a trader said. The spring wheat cash market was "weak" after heavy movement last week, he said.

 

There are ideas that conditions for spring wheat planting are improving somewhat after delays in the northern U.S. Plains due to cool, wet weather, a trader said. The USDA will update its estimate on planting in a weekly crop progress report due at 4 p.m. EDT. Analysts estimated planting at 42% to 45% complete, although the trader pegged planting lower at 38% to 40% complete.