June 2, 2006

 

US Wheat Review on Thursday: Mostly weak on consolidation trade

 

 

U.S. wheat futures ended mostly lower Thursday in consolidation trade after this week's losses, with U.S. hard wheat futures leading losses after Chicago Board of Trade July set an early three-week low, brokers said.

 

"Spreads are realigning after the CBOT fell sharply late Wednesday and the other two markets didn't fall as hard," said Vic Lespinasse, a CBOT floor analyst for AG Edwards & Sons.

 

Losses in precious metal futures and lingering talk that some early HRW wheat yields have topped dismal pre-harvest expectations were also bearish, brokers said.

 

CBOT July wheat ended down 1 1/2 cents at US$3.92 after setting early a 3-week low of US$3.89.

 

Speculative funds settled the session about net even traders after buying about 2,000 CBOT wheat futures by 1330 EDT, CBOT sources said.

 

Funds sold at least 10,000 CBOT wheat futures during Wednesday's month-end trading session, brokers added.

 

CBOT wheat spread trade ahead of the June 30 first notice day for deliveries against nearby July wheat were much more modest than those seen Wednesday.

 

ABN Amro spread 1,600 September/July while Fimat spread 500 July/December, brokers said.

 

Midday spot U.S. HRW Gulf barge bids fell 3 cents Thursday while cash SRW bids rose 4 cents, cash sources said.

 

Overnight U.S. wheat export sales were quiet.

 

Analysts expected the U.S. Department of Agriculture to report early Friday that weekly U.S. wheat export sales totaled 150,000 to 350,000 tonnes.

 

In global wheat news, the European Union grain management committee Thursday granted 4,150 metric tonnes of subsidized wheat from the free-market with a maximum refund of EUR6.00.

 

In the previous tender the E.U. granted 79,000 tonnes at a maximum rebate of EUR6.25/tonne.

 

The EU also granted licenses to export 183,853 metric tonnes of wheat and 84,154 tonnes of rye from intervention stores, E.U. figures show. The intervention wheat licenses were divided up between seven different countries, including 84,232 tonnes for Germany at EUR110.10/tonne.

 

 

Kansas City Board of Trade

 

KCBT July wheat closed down 4 1/4 cents at US$4.83 1/2.

 

The KCBT/CBOT July wheat spread corrected to 91 1/2 cents, premium KCBT, after Wednesday's new high settlement of 94 1/4, premium KCBT. The spread rose late Wednesday amid the sharp fund-led break in CBOT wheat, brokers said.

 

Spot cash 11% U.S. hard red wheat basis bids were flat Thursday, while bids for 12% through 14% HRW fell 2 cents, according to the KCBT.

 

Lingering talk that early hard red winter wheat yields have topped dismal pre-harvest expectations and reports of high protein HRW wheat following this year's drought stress were also noted, brokers noted.

 

However, they also said scattered rains this week have slightly delayed the south Kansas harvest - an ironic factor as farmers desperately needed timely rains throughout the growing season.

 

 

Minneapolis Grain Exchange

 

MGE July settled Thursday down 2 1/2 cents at US$4.59 per bushel.

 

Cash spring wheat basis bids were mixed Thursday, cash sources said. Minneapolis wheat receipts totaled 44 railcars versus last year's 135 railcars. There were 25 durum receipts compared with last year's 50 cars.