June 6, 2008

  

US Wheat Review on Thursday: Climbs on CBOT corn, soy spillover

 

 

U.S. wheat futures rallied Thursday on borrowed strength from sharp gains in CBOT corn and soybeans.

 

Chicago Board of Trade July wheat jumped 32 1/2 cents to US$7.85 1/2 per bushel. Kansas City Board of Trade July wheat surged 24 1/2 cents to US$8.14 1/2, and Minneapolis Grain Exchange July wheat soared 30 cents to US$9.70.

 

CBOT corn and soybeans dragged wheat into positive territory, as the row crops surged on concerns about excessive precipitation in the U.S. Midwest. There also was some bullish market chatter about the potential for damage to soft red winter wheat from the wet conditions.

 

Higher than average rain totals are expected during the next five days through parts of Illinois, Wisconsin, Iowa and Missouri, according to T-Storm Weather.

 

Commodity funds bought an estimated 4,000 wheat contracts at the CBOT. In CBOT pit trades, RJ O'Brien bought 500 December.

 

Weekly U.S. wheat export sales were unimpressive, a CBOT floor trader said. Total sales for the week ended May 29 were 237,800 tonnes, which was within trade expectations.

 

Wheat will likely continue to look to CBOT corn and soy for direction Friday, an analyst said. The markets could see some profit-taking pressure ahead of the weekend, he said.

 

 

Kansas City Board of Trade

  

KCBT wheat futures followed CBOT corn and soybeans higher, a floor trader said. Strength in the other markets was the driving factor for KCBT wheat amid a dearth of fresh fundamental news, he said.

 

CBOT wheat gained on KCBT wheat because harvest of hard red winter wheat, used to make bread, is picking up in the U.S. Plains, said Larry Glenn, owner of Glenn Commodities. Cutting is active in Oklahoma and Texas, according to harvest reports.

 

 

Minneapolis Grain Exchange

  

MGE wheat also was seen as a follower of the other markets, with traders watching activity at the CBOT and KCBT. The gains in nearby MGE July wheat were a turnaround from the contract's sharp losses during the past two day sessions.

 

The daily trading limit for MGE wheat on Friday remains expanded to 90 cents after the July contract tumbled the default 60-cent limit Tuesday. The limit is 60 cents at the CBOT and KCBT.