US Wheat Review on Tuesday: Closes higher after trading both sides

 

 

U.S. wheat futures ended higher Tuesday after trading in both positive and negative territory, with Minneapolis Grain Exchange wheat leading the upside on planting worries.

 

Chicago Board of Trade July wheat finished up 2 cents at US$5.92 3/4 a bushel. Kansas City Board of Trade July wheat closed up 3 1/2 cents at US$6.37 1/2, and Minneapolis Grain Exchange July wheat gained 7 1/4 cents to US$7.04 3/4.

 

Wheat felt spillover from technical buying and gains in CBOT corn, traders said. CBOT July wheat bounced from its open outcry session low of 5.80, which was near a technical support level, a trader said.

 

Corn settled higher on U.S. Department of Agriculture data that showed U.S. ending stocks were tighter than expected. Corn and wheat are linked because both are used for animal feed and funds often trade in a basket of commodities.

 

Traders cautioned against reading too much into wheat's recovery as volume was thin. It didn't take much to move the market a nickel, a CBOT floor trader said.

 

The USDA's estimates for a smaller-than-expected U.S. winter wheat crop were "friendly" for the markets, but growing world ending stocks were bearish, an analyst said. World wheat ending stocks for 2008-09 were pegged at 167.05 million tonnes, up from 158.1 million last month, while carryout for 2009-10 was estimated at 181.9 million.

 

CBOT July wheat closed at its highest price since Jan. 29. Its open outcry session high of US$5.97 was the highest price since Feb. 9.

 

 

Kansas City Board of Trade

 

KCBT wheat traded both up and down without strong direction. Nearby July wheat closed at its highest price since Jan. 28 and finished well above its session low of US$6.24.

 

The USDA estimated hard red winter wheat production at 871 million bushels, compared with the average analyst estimate of 881 million and the 1.035 million produced last year. Oklahoma in 2009 is projected to produce 80.5 million bushels of HRW wheat, used to make bread, down nearly 52% from last year following drought and freeze damage.

 

 

Minneapolis Grain Exchange

 

MGE wheat felt solid underlying support from continued worries about cool, wet weather delaying U.S. spring wheat planting, traders said. North Dakota's crop was 13% seeded as of Sunday, compared to the average of 74%, according to the USDA

 

Rain fell in North Dakota Tuesday and was expected to continue Wednesday, a meteorologist said. "If we got a good break in the weather, we'd certainly see a little more of this planted, but it's still raining right now," said Joel Ransom, a North Dakota State University extension agronomist.