US Wheat Review on Monday: Soars to 8-month highs on funds, spillover

 

 

U.S. wheat futures climbed to eight-month highs and finished near session highs Monday on fund buying and the weak U.S. dollar, analysts said.

 

Chicago Board of Trade July wheat soared 37 1/4 cents to US$6.74 1/2 a bushel. Kansas City Board of Trade July wheat jumped 39 cents to US$7.26, and Minneapolis Grain Exchange July wheat rallied 23 cents to US$7.95.

 

Commodity funds bought an estimated 6,000 contracts at the CBOT. Short-covering and technical buying added strength as CBOT July wheat hit an open-outcry session high of US$6.76, its highest price since Oct. 3.

 

The falling dollar and rallies in crude oil and stocks supported gains, analysts said. CBOT soybeans also rallied, while corn ended higher.

 

Market participants want to stay short, or maintain sold positions, in wheat ahead of harvest, which typically weighs on prices, but the markets keep gaining, said Jerry Gidel, analyst for North America Risk Management Services. Hard red winter wheat and soft red winter wheat cutting are underway in the southern U.S.

 

"It just keeps running over them," Gidel said about the surging market.

 

Non-commercial speculative funds have been trimming their net short position in CBOT wheat in recent weeks, according to Commodity Futures Trading Commission data. They were net short 14,700 contracts as of May 26, down from a net short position of 18,473 contracts a week earlier.

 

 

Kansas City Board of Trade

 

KCBT wheat ended higher on support from outside markets and new money coming into the markets, traders said. The rally continued the recent upward trend, they said. July wheat hit an open outcry session high of US$7.27, its highest price since Oct. 2.

 

Traders are waiting to see the U.S. Department of Agriculture's weekly crop progress report for updates on winter wheat condition ratings and, in some states, on harvest activities. HRW wheat cutting has begun in Texas and Oklahoma.

 

 

Minneapolis Grain Exchange

 

MGE July wheat set a session high of US$7.97 1/4, its highest price since Sept. 29. Money flows and firm outside markets were the main stories of the day, traders said.

 

The crop progress report, due out at 4 p.m. EDT, will show how much of the U.S. spring wheat crop has been planted as of Sunday. Citigroup estimated seeding, which has been delayed by excessively wet and cool weather in the northern Plains, was about 93% complete, up from 79% a week ago.