May 24, 2008

 

US Wheat Review on Friday: Mixed in choppy trade before holiday

 

 

U.S. wheat futures closed mixed after a choppy and lightly traded session ahead of the Memorial Day holiday weekend, traders and analysts said Friday.

 

Chicago Board of Trade July wheat rose 7 1/2 cents to US$7.52 1/2, Kansas City Board of Trade July fell 2 1/2 cents to US$7.97 3/4 and Minneapolis Grain Exchange September added 5 cents to settle at US$8.57 a bushel.

 

Traders adjusted positions, and some decided to cover shorts before the three-day weekend, which boosted prices in Chicago and Minneapolis.

 

An erratic trade in crude oil led to choppiness in both corn and wheat, however, and traders seemed unwilling to commit strongly to either side of the market.

 

Prices did manage to bounce after making five- and six-month lows early in the session on the short-covering activity.

 

"We've taken these prices down pretty good the last several weeks. Going into the weekend, I think they were doing a little bit of short-covering and will re-assess the situation after the weekend," said Shawn McCambridge, senior grains analyst at Prudential Financial in Chicago.

 

"Other than that, there really wasn't much conviction on either side of this market," he said.

 

Meanwhile, widespread storms in the northern Plains will favor the spring wheat crop.

 

Midwestern soft red winter wheat is expected to receive rains over the weekend, most of which are considered beneficial, although flooding is a concern in western areas.

 

All of the weather factors, however, have been factored into prices. "We don't have an issue that hasn't been priced into the market already," said McCambridge.

 

 

Kansas City Board of Trade

 

Futures finished slightly lower with the HRW harvest just getting started amid light, choppy trade.

 

HRW wheat areas of the southern Plains are expected to turn hotter, which will stress the filling wheat crop in northern Texas and southern Oklahoma, while thunderstorms are more seasonal temperatures benefit the wheat in parts of Kansas and Nebraska, DTN Meteorlogix said.

 

 

Minneapolis Grain Exchange

 

Prices rose as spring wheat largely followed the choppy action at the CBOT. Favorable rains are expected to boost spring wheat development in the Dakotas, a trader said.

 

MGE September wheat rose 5 cents a bushel to finish at US$8.57, near the US$8.58 session high.