May 27, 2006

 

US Wheat Review on Friday: Up on pre-holiday speculative buys, human rights watch heat

 

 

U.S. wheat futures ended higher Friday on speculative buying ahead of the three-day Memorial Day holiday and next week's quarter and fiscal-year end for some firms, brokers say.

 

U.S. futures exchanges will be closed on Monday in observance of the Memorial Day holiday.

 

Worries about U.S. hard red winter wheat crop losses buoyed Kansas City Board of Trade wheat futures, brokers said.

 

Reports of crop-damaging droughts in China and Spain and gains in U.S. gold and crude oil futures were also supportive, brokers said.

 

CBOT July wheat ended Friday up 6 cents at US$4.15 1/2 per bushel, below this week's 3 1/2-year high of US$4.33.

 

Speculative funds bought 4,000 futures by 1330 EDT, brokers said.

 

In CBOT wheat trade, FC Stonnee spread 500 July/September and ADM spread 500 September/July.

 

June 30 is first notice day for delivery against the three U.S. July wheat futures contracts.

 

Midday spot U.S. hard red winter wheat Gulf barge bids were flat Friday while spot soft red winter wheat bids rose 2 cents, cash sources said.

 

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.

 

In Texas, cutting in the key panhandle region should begin around June 10 to June 20, according to Lauri Vaughn, vice president and communications director for the Texas Wheat Producers.

 

Texas has been forecast to produce just 35.1 million bushels of winter wheat this year, billed by some as the worst in history. The Texas winter wheat crop was 5% harvested statewide as of Sunday, just behind the five-year average of 6%, the USDA said last Monday.

 

 

Kansas City Board of Trade

 

KCBT July wheat closed up 7 1/4 cents at US$5.06.

 

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

 

Traders noted concerns about crop damage amid very hot temperatures lingered.

 

The crop in Kansas, the top U.S. wheat producer, has already suffered due to drought and some disease pressure, with KCBT futures on Tuesday setting a near-10-year high of US$5.22 1/2 per bushel on concerns about tight supplies.

 

Kansas State University professor Jim Shroyer told Dow Jones Newswires Thursday that the 2006 Kansas wheat crop could fall below 300 million bushels, well below last year's harvest of 380 million bushels.

 

Forecasts for the U.S. hard red winter wheat belt called for temperatures to remain above normal, with highs in the upper-80s to mid-90s Fahrenheit, through Sunday.

 

The six- 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.

 

 

Minneapolis Grain Exchange

 

MGE July settled up 6 3/4 cents at US$4.70 per bushel.

 

Cash spring wheat basis bids were steady to 10 cents higher Friday, cash sources said. Friday's Minneapolis wheat receipts totaled 119 railcars versus last year's 204 railcars. There were 32 durum receipts versus last year's 4 cars.