US Wheat Review on Friday: Markets pull back ahead of weekend

 

 

U.S. wheat futures fell Friday and closed mostly lower on the week as weakness in neighboring markets and expectations for improved planting weather dragged prices lower, analysts said.

 

Chicago Board of Trade July wheat fell 15 3/4 cents to US$5.77 1/2 a bushel, down 13 1/2 cents on the week. Kansas City Board of Trade July wheat lost 13 1/4 cents to US$6.30 1/2. Minneapolis Grain Exchange July wheat was down 20 1/2 cents at US$7.05 1/4.

 

Profit-taking dragged down grains and soybeans ahead of the weekend, said Tim Hannagan, analyst for Alaron. Wheat was looking to the other markets for direction, a trader said.

 

"It is Friday," Hannagan said. "This is the profit-taking game that we play."

 

Global fundamentals for U.S. wheat remain bearish, analysts said. World wheat ending stocks are ample, and U.S. export demand is slow due to competition for business from other countries, they said.

 

The U.S. Department of Agriculture this week raised its forecast for 2008-09 world wheat carryout 9 million tonnes from April to 167.05 million tonnes. Carryout for 2009-10 was estimated at 181.9 million.

 

"Inventories are high," Hannagan said. "Demand is low."

 

CBOT July wheat closed near its open outcry session low of US$5.75.

 

 

Kansas City Board of Trade

 

KCBT July wheat closed near its open outcry session low of US$6.29 1/2. The contract ended down 2 1/2 cents on the week.

 

"You're always going to see profit-taking at the end of the week," Hannagan said.

 

Outside of spring wheat planting delays in the northern U.S. Plains, there are not major production problems in the world, an analyst said. Western Australia, where planting should start soon, is the driest area for winter grains Down Under, and the region could see up to 1 inch of rainfall Wednesday to Sunday, according to Cropcast Agricultural Weather.

 

 

Minneapolis Grain Exchange

 

MGE July wheat closed up 5 1/4 cents on the week.

 

The market has felt support recently from worries about planting delays caused by cool, wet weather. Yields can suffer due to late planting, and farmers could potentially switch acres to other crops or plant nothing at all.

 

There are ideas seeding of spring wheat in the northern U.S. Plains will progress due to drier weather, Hannagan said. That prompted traders to take some weather premium out of the market, he said.

 

Weather should be mostly dry into early next week, with temperatures warming as early as Sunday, according to T-Storm.

 

Still, planting conditions look "dicey," so traders will watch weather closely next week, an analyst said.