US Wheat Review on Thursday: MGE leads upside on spring planting woes

 

 

U.S. wheat futures closed higher Thursday, with Minneapolis Grain Exchange wheat leading the upside and hitting a fresh seven-month high on worries about slow spring wheat planting.

 

Chicago Board of Trade July wheat gained 4 1/2 cents to close at US$5.93 1/4 a bushel. Kansas City Board of Trade July wheat rose 5 3/4 cents to US$6.43 3/4, and MGE July wheat climbed 12 1/2 cents to US$7.25 3/4.

 

CBOT and KCBT wheat felt spillover support from a rally in CBOT soybeans, traders said. Soybeans continued to soar on technical momentum and worries about tight supplies, with the July contract ending up 19 1/2 cents at US$11.47 1/2.

 

"We're getting a lot of help from the soybean complex," a trader said.

 

Total weekly U.S. wheat export sales of 234,100 tonnes were weak, traders said, and at the low end of trade expectations of 200,000 tonnes to 450,000 tonnes. U.S. export demand has been lackluster for "the majority of this year" due to ample global supplies and competition from other exporting countries, an analyst said. There was a lack of other fresh fundamental news for the markets, traders said.

 

 

Kansas City Board of Trade

 

Firm CBOT soybeans and worries about hard red winter wheat production helped support KCBT wheat, traders said. There are ideas Kansas, Oklahoma and Texas will produce less wheat than the U.S. Department of Agriculture expects, said Tom Leffler, owner of Leffler Commodities. The states struggled with drought and then a freeze.

 

Too much rain in parts of Kansas is not beneficial for the crop, Leffler said. Excessive wetness can reduce yields and increase disease pressure.

 

"Wheat's not a wet weather crop," he said. "That's one of the problems in the eastern part of the state."

 

 

Minneapolis Grain Exchange

 

MGE July wheat hit a fresh seven-month high of US$7.30 before trimming gains a bit. Unseasonably cool temperatures and excessive precipitation have caused major delays in spring wheat planting in the northern U.S. Plains.

 

"Nothing's changed out there," Leffler said. "You've still got a situation where they're having trouble."

 

There's hope for improvement in the pace of planting, according to Cropcast Agricultural Weather. Showers during the past week "have not been very heavy or persistent, which has allowed planting to already improve a bit," the private weather firm said.

 

The forecast for the next 10 days shows limited rainfall, and there should be some "significant increases" in planting activities, Cropcast said. Continued coolness could remain a hindrance early next week, but temperatures are expected to warm by later next week, it said.