US Wheat Review on Monday: Climbs on outside markets, money flows

 

 

U.S. wheat futures climbed Monday on spillover support and money flows into the markets, with traders monitoring Egyptian quarantines of Russian wheat.

 

Chicago Board of Trade July wheat ended up 13 cents at US$5.90 1/2 a bushel. Kansas City Board of Trade July wheat gained 13 1/2 cents to US$6.44, and Minneapolis Grain Exchange July wheat rose 13 3/4 cents to US$7.19.

 

Gains in equities and crude oil and weakness in the U.S. dollar were supportive for wheat, traders said. The markets fed on one another after a sell-off Friday, they said. A soft dollar is seen as bullish because it makes U.S. wheat more competitive on the world market.

 

There was additional support from ideas that Russia, which has been an aggressive wheat exporter on the world market, may become less competitive due to quality problems, said Louise Gartner, analyst for Spectrum Commodities. Three vessels carrying Russian wheat have been detained at Egyptian ports, in addition to a shipment quarantined last week, the chief executive of the grain trading house Egyptian Traders told Dow Jones Newswires.

 

Egypt, a major buyer on the world wheat market, is known for being price-conscious and bought a hefty amount of Russian wheat this year. The U.S. is known as a reliable provider of quality wheat, while there has been chatter about possible quality problems in Russia on and off all year.

 

 

Kansas City Board Of Trade

 

KCBT wheat found support from outside markets, including stronger stocks and crude oil and the weaker dollar, a floor trader said. The rally in wheat appeared to be more of "a macroeconomic move" than one related to fundamentals, he said.

 

"It just seemed like new money flowing in," he said.

 

KCBT July wheat in open outcry activity hit a session high of US$6.53. That represents a fresh high for the recent move and its highest price since Jan. 26.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed up despite expectations that producers in the northern U.S. Plains will see improved weather for spring wheat planting, traders said. Cool, wet weather has slowed seeding for weeks.

 

"Dry weather over the weekend provided soils with a chance to dry out," Cropcast Agricultural Weather said. "More dry weather is expected in most of the spring wheat areas through most of this week, which should allow planting to accelerate."

 

The U.S. Department of Agriculture, in its weekly crop progress report, is expected to estimate planting is about 50% complete, analysts said. A week ago, 35% of the crop was in the ground, down from 77% a year earlier and the average of 78%. The report is due out at 4 p.m. EDT.