May 29, 2008

 

US Wheat Review on Wednesday: CBOT July ends flat after early weakness

 

 

U.S. wheat futures closed mixed Wednesday after rebounding from early weakness in thin volume trading.

 

Chicago Board of Trade July wheat closed unchanged at US$7.59 a bushel. Kansas City Board of Trade July wheat slipped 1 1/2 cent to US$8.03 1/2, and Minneapolis Grain Exchange July wheat rose 5 cents to US$10.50.

 

Wheat bounced after traders were unable to push the CBOT July contract below technical support in the area around US$7.40. The market is having a hard time pressing below the area of US$7.30 to US$7.50 because many traders felt that was a downside target, said Roy Huckabay, analyst for the Linn Group.

 

Wheat seemed to rise as soybeans and crude oil rallied, traders said. The gains in other markets could have given wheat a boost, although wheat and crude are not thought of as being as closely linked as crude and corn or soybeans, they said.

 

"Corn didn't end down as low as it was," an analyst said. "When the oil and gold and everything tries to come back around again, the whole floor seems to trade off that."

 

 

Kansas City Board of Trade

 

KCBT wheat ended in negative territory amid scattered chatter about the start of the U.S. winter wheat harvest, traders said. Harvest is 6% complete in Texas, compared to the five-year average of 8%, according to the National Agricultural Statistics Service. Cutting also has started in southern Oklahoma, according to the Oklahoma Wheat Commission.

 

Still, "it's a little too early to get harvest pressure" on the markets, said Jerry Gidel, analyst for North America Risk Management Services. "We still have that in front of us."

 

The U.S. Department of Agriculture raised its good-to-excellent rating for winter wheat to 47%, up two percentage points from a week ago. Kansas' crop was rated 49% good to excellent, up from 43% the previous week.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures finished mostly higher. Bull spreading supported the nearby July contract during much of the day session, MGE traders said.

 

Floor activity was "dead," a trader said.

 

The USDA's first spring wheat condition report of the year showed 52% of the crop is rated good to excellent, compared to 79% last year. Forty-one percent of the crop was rated fair, up from 17% last year.