US Wheat Review on Tuesday: Ends slightly down as markets consolidate

 

 

U.S. wheat futures consolidated Tuesday and closed lower, with Minneapolis Grain Exchange wheat leading the downside amid expectations for improved planting weather.

 

Chicago Board of Trade July wheat slipped 1 3/4 cents to US$5.88 3/4 a bushel. Kansas City Board of Trade July wheat shed 1 1/4 cents to US$6.42 3/4, and Minneapolis Grain Exchange July wheat lost 5 1/2 cents to US$7.13 1/2.

 

The markets traded both sides during the session and settled only a few cents weaker at the CBOT and KCBT. They pulled back after a rally Monday amid a lack of "dynamic" fundamental news, said Greg Wagner, senior commodity analyst for AgResource Co.

 

"You started wheat out with a rocket shot," Wagner said, referring to Monday's gains. "Now we're just backing up and consolidating. I wouldn't want to read too much into it."

 

Wheat felt support earlier in the session from outside markets, including weakness in the U.S. dollar that makes U.S. grains look more attractive to foreign buyers, a trader said. CBOT corn and soybeans closed higher despite the slump in wheat.

 

Wheat has looked to the neighboring markets for direction lately, with soybeans seen as the leader on the agricultural flood. Corn and soy are watching weather forecasts after rains delayed plantings in the eastern U.S. Corn Belt.

 

The region should be dry at least through Friday, which should allow planting to progress, analysts said. If rains hold off through next week, CBOT July wheat could slip "pretty fast" to a support level at US$5.50, said Jerry Gidel, analyst for North America Risk Management Services.

 

 

Kansas City Board of Trade

 

KCBT wheat closed slightly lower in a setback from Monday's surge, a trader said. KCBT July wheat in open outcry trading Thursday hit its highest price since Jan. 26.

 

Farmers have started cutting wheat in south and west-central Texas with harvest as of Sunday one percentage point ahead of normal at 3%, according to the U.S. Department of Agriculture. The crop was hurt by drought and freeze, and farmers across Texas were baling freeze-damaged wheat for hay, it said.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside amid expectations that warmer, drier weather will encourage plantings of U.S. spring wheat this week, an analyst said. Cool, wet weather has slowed planting in the northern U.S. Plains.

 

Dry weather is expected to continue through the weekend and into next week in some areas, with temperatures near normal levels, according to a forecast from Cropcast Agricultural Weather. That will "certainly allow" soils in the Red River Valley to dry out, accelerating the pace of planting, the private weather firm said.

 

Concerns about the potential for farmers to shift land to other crops, such as soybeans, from spring wheat are largely factored into the market, Wagner said. Spring wheat planting was 50% complete as of Sunday, down from the average of 90%, the USDA said.