May 14, 2008

 

US Wheat Review on Tuesday: Slips on weak corn, lack of fresh news

 

 

U.S. wheat futures stumbled Tuesday on spillover selling from corn and a lack of fresh supportive news, traders and analysts said.

 

Chicago Board of Trade July wheat fell 9 3/4 cents to US$7.95 3/4 per bushel. Kansas City Board of Trade July wheat shed 7 3/4 cents to US$8.35 1/4, and Minneapolis Grain Exchange July wheat slipped 1 cent to US$10.47.

 

Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

"There's very little new news for the wheat traders to look at," said Brian Hoops, president of Midwest Market Solutions. "They see corn falling, and they sell wheat along with it."

 

Looking forward, projections for a record world wheat crop should remain bearish for the markets after producers expanded plantings to take advantage of high prices, traders said. Crop condition looks mostly favorable around the world, analysts said.

 

Soft red winter wheat, which is used for pastries and grown in the eastern third of the U.S., "as a whole looks decent" according to reports from farmers, said Jason Britt, broker and analyst at Central State Commodities.

 

There are some concerns about dryness in Australia, although production there is still expected to rebound after two years of severe drought, analysts said. Australia's wheat country has significant rainfall possible for South Australia, Victoria and New South Wales later this week and over the weekend, DTN Meteorlogix said in a forecast.

 

 

Kansas City Board of Trade

 

Weakness in CBOT corn and forecasts for beneficial weather for U.S. Plains hard red winter wheat were bearish for KCBT wheat futures, a trader said. Conditions for jointing and heading hard wheat look favorable, Meteorlogix said.

 

The USDA, in its weekly crop progress report Monday, lowered the good-to-excellent rating for Kansas' crop by one percentage point to 44% and kept its rating for the whole winter wheat crop unchanged at 47%. The report did not cause major ripples in the market, the trader said.

 

 

Minneapolis Grain Exchange

 

MGE July wheat has "the most bullish story" in the wheat markets amid lingering concerns about tight old-crop supplies of spring wheat, Hoops said. The contract was firmer for much of the day session before slipping in late dealings.

 

"None of the producers are selling it," Hoops said about old-crop spring wheat supplies. "The elevators that we talked to up in the Daktoas, nobody can get anything bought. That market looks to be in a situation by itself where tight supplies may give us a pop in the market."