May 26, 2006

 

US Wheat Review on Thursday: Weak on profit-taking; human rights watch crop eyed

 

 

U.S. wheat futures ended mostly weak Thursday on pre-holiday profit-taking after this week's near 10-year top in KCBT wheat and 3-1/2-year high in CBOT on U.S. hard red winter wheat crop concerns and fund buying, brokers said.

 

U.S. futures exchanges will be closed on Monday in observance of the Memorial Day holiday. Futures markets will close at normal hours on Friday.

 

Seasonal U.S. wheat harvest pressure may be seen next week, some brokers said.

 

Both the U.S. hard red and soft red winter wheat harvests have begun. Kansas wheat groups may begin issuing winter wheat harvest reports late next week, depending on harvest progress.

 

Spreading of September/July wheat futures contracts was also noted Thursday ahead of the June 30 first notice day for delivery against the three U.S. July wheat futures contracts.

 

CBOT July wheat ended Thursday down 2 1/4 cents at US$4.09 1/2 per bushel.

 

Speculative funds bought 1,100 CBOT wheat futures contracts by 1230 EDT, brokers said.

 

Fimat, JP Morgan and ABN Amro each bought 500 July whie Citigroup sold 500 July, they said.

 

Rand and Fimat each spread 1,000 September/July.

 

Midday spot U.S. HRW Gulf barge bids were steady Thursday and spot SRW bids rose 5 cents, cash sources said.

 

In overnight U.S. wheat export news, Japan bought 65,000 tonnes of U.S. wheat in an overall tender of 151,000 tonnes.

 

Weekly U.S. wheat export sales of 254,800 tonnes were within traders' estimates of 150,000 to 400,000 tonnes, but some said they were "nothing exceptional."

 

In global wheat news, U.K. cash wheat prices were mostly steady Thursday, but trade was at a standstill with offices in France and Germany closed for Ascension Day.

 

The International Grains Council boosted its forecast for 2006-07 world wheat production by 2.6 million tonnes from its April estimate to 600.5 million metric tonnes.

 

However, the IGC lowered its 2006-07 world wheat ending stocks forecast by 1 million tonnes to 118 million tonnes, the lowest since 1981-82, following its drawdown of 5 million bushels in 2005-06 world wheat ending stocks.

 

 

Kansas City Board of Trade

 

KCBT July wheat ended Thursday down 2 3/4 cents at US$4.98 3/4 per bushel.

 

Spot cash 11% through 14% U.S. hard red wheat basis bids were unchanged Thursday, according to the KCBT.

 

In Kansas, crop specialist Jim Shroyer of Kansas State University, said hot temperatures into next week could further damage this year's drought-stricken hard red winter wheat crop, cutting production to under 300 million bushels.

 

"If we get over 300 million bushels, I'll just be stunned," Shroyer told Dow Jones Newswires in a telephone interview as he toured Kansas wheat fields.

 

Forecasts on Thursday called for temperatures to remain above normal, with highs in the upper-80s to mid-90s Fahrenheit, through Sunday.

 

The 6- to 10-day weather forecast for the key U.S. hard red winter wheat growing belt called for above to well-above normal temperatures, according to DTN Weather.

 

"I don't know how low it can go," Shroyer said of Kansas' 2006 wheat production. "If we get 319 million bushels, like we predicted, I will think 'what would it have yielded if it had rained.' I know the varieties are excellent, but they can only go so long without water."

 

 

Minneapolis Grain Exchange

 

MGE July closed down 6 cents at US$4.63 1/4 per bushel.

 

Informa Economic's forecast Wednesday of an increase in 2006 U.S. spring wheat plantings to 14.75 million acres continued to weigh on MGE wheat futures, sources said.

 

Cash spring wheat basis bids were steady to 8 cents lower Thursday, cash sources said. Thursday's Minneapolis wheat receipts totaled 156 railcars vesus last year's 215 railcars. There were zero durum receipts versus last year's 79 cars.