US Wheat Review on Wednesday: Climbs on outside markets, fund buying

 

 

Supportive outside markets and fund buying pushed U.S. wheat futures solidly higher Wednesday despite a lack of fresh fundamental news.

 

Chicago Board of Trade July wheat closed up 9 cents at US$5.97 3/4 a bushel. Kansas City Board of Trade July wheat rose 7 1/4 cents to US$6.50, and Minneapolis Grain Exchange July wheat gained 12 cents to US$7.25 1/2.

 

Weakness in the U.S. dollar and gains in crude oil helped boost prices, traders said. Crude oil is linked to the grains because funds often trade in a basket of commodities and because ethanol is made from corn. A weak dollar makes U.S. grains more attractive to foreign countries.

 

"A lot of the strength today was really just following the outsides," a trader said. "The dollar was getting beat up all day."

 

Fund buying early in the trading session pushed CBOT July wheat to a fresh high for its recent move of US$6.04, its highest prices since Jan. 30, traders said. Overall, funds had bought an estimated 3,000 contracts by the end of the day, they said.

 

New investment money seems to be flowing into commodities as the appetite for risk expands, an analyst said.

 

 

Kansas City Board of Trade

 

KCBT wheat closed higher on bullish signals from the dollar, crude oil and equities, a floor trader said. KCBT July wheat set a fresh high for its recent move of US$6.59, its highest price since Jan. 9.

 

"There was really no new news that we saw come across," the trader said. "Wheat was a follower. It's new money coming in."

 

The U.S. Department of Agriculture is slated to issue its weekly export sales data at 8:30 a.m. EDT (1230 GMT) Thursday. Analysts expect export sales of wheat for the week ended May 14 to be 200,000 tonnes to 450,000 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the upside at the close. The session high for MGE July wheat was US$7.26 1/2, its highest price since last Thursday.

 

Tight deliverable supplies of hard red spring wheat offset bearish ideas that farmers are making progress planting spring wheat, a trader said. Weeks of cool, wet weather in the northern U.S. Plains have delayed producers from seeding the crop, although conditions have turned warmer and drier.

 

Total deliverable HRS wheat stocks dropped to 3.089 million bushels as of May 15 from 3.592 million bushels a week earlier, according to data issued Tuesday by the MGE. A year earlier, deliverable stocks were 11.568 million bushels.