US Wheat Review on Thursday: Hits multi-month highs, trims gains

 

 

U.S. wheat futures trimmed gains after hitting fresh multi-month highs Thursday but settled mostly higher on fund buying and crop worries.

 

Chicago Board of Trade July wheat closed up 4 3/4 cents at US$6.30 1/2 per bushel. Kansas City Board of Trade July wheat rose 5 3/4 cents to US$6.80 3/4, and Minneapolis Grain Exchange July wheat tumbled 12 1/4 cents to US$7.67 1/2.

 

CBOT wheat pared gains after the July contract hit an open outcry session high of US$6.45, its highest price since Jan. 9. Traders booked profits following recent rallies, said Dale Durchholz, analyst for AgriVisor.

 

"It got a new high and couldn't hold it," he said. "You've got a weekend right on your doorstep."

 

Fund buying, short-covering and crop worries helped underpin CBOT wheat and keep it in positive territory, traders said. Commodity funds bought an estimated 3,000 contracts.

 

There are concerns about fungal diseases, such as head scab, hurting U.S. soft red winter wheat quality and yields. Dryness in Argentina, parts of Canada and Eastern Europe is are worth watching, Durchholz said.

 

Wheat seems to be in "an environment of change" as the markets transition from feeling that world supplies were ample to uncertainty about production potential, Durchholz said. There are no major problems around the world yet, but traders are keeping their eyes on several areas, he said.

 

 

Kansas City Board of Trade

 

Traders took profits in KCBT wheat after the nearby July contract hit an open outcry session high of US$6.95 1/4, an analyst said. That was its highest price since Oct. 3.

 

There are worries about poor yields coming out of the early hard red winter wheat harvest in the southern U.S. Plains, an analyst said. Yields were expected to be low due to damage from drought and freezes earlier in the year.

 

It continues to seem as though "new money" is moving into the markets, a trader said. Technical buying helped support gains, he said.

 

 

Minneapolis Grain Exchange

 

MGE wheat slid late on profit-taking after leading the upside in recent rallies, traders said. Earlier in the session, MGE July wheat reached a fresh eight-month session high of US$7.93 1/4, its highest price since Sept. 29.

 

"Profit-taking was really very much in play in Minneapolis," Durchholz said.

 

Temperatures in the northern U.S. Plains are expected to "warm notably this week, which should allow early growth to accelerate" in spring wheat after planting delays due to cool, wet weather, according to Cropcast Agricultural Weather. A "big concern" is low soil moisture supplies across north-central and western Saskatchewan and southern Alberta, the private weather firm said.