June 7, 2008

  

US Wheat Review on Friday: Surges on weak dollar, outside markets

  

 

U.S. wheat futures Friday closed sharply higher for the second consecutive session, with support seen from short-covering, weakness in the greenback and surging outside markets, analysts said.

 

Chicago Board of Trade July wheat rose 25 1/2 cents to US$8.11 per bushel, up 49 1/2 cents on the week. Kansas City Board of Trade July wheat jumped 32 1/4 cents to US$8.46 3/4, and Minneapolis Grain Exchange July wheat climbed 57 1/4 cents to US$10.27 1/4.

 

Commodities in general felt a boost from new record highs in crude oil and softness in the U.S. dollar index, analysts said. There also was some positioning in wheat ahead of government crop reports next week, they said.

 

The U.S. Department of Agriculture on Tuesday will issue updated supply/demand and wheat production reports. Despite expectations for an increase in all winter wheat production and new-crop ending stocks, there is uncertainty about the condition of the winter wheat crop, said Dave Marshall, an independent marketing adviser and commodities broker.

 

Excessive wetness in soft red winter wheat regions, such as parts of the Ohio River Valley, has likely deteriorated the condition of the crop, but it's unknown whether the USDA report will reflect the losses, Marshall said. More rain is expected in the Midwest in the near term.

 

"This weather pattern continues to promise more rain," Marshall said. "You've got soon-to-harvest wheat that's at risk for too much rain."

 

There will likely be more position-evening Monday ahead of the USDA crop reports, traders said. The USDA also is slated to issue a weekly crop progress report Monday afternoon.

 

 

Kansas City Board of Trade

  

KCBT wheat futures rose amid support from the outside markets and the weak dollar. KCBT July wheat ended up 44 3/4 cents on the week.

 

Storms Thursday suspended wheat cutting across Oklahoma, and high winds damaged the crop, according to a harvest update issued Friday by the Oklahoma Wheat Commission. Mainline winds of 80 to 90 miles per hour accompanied rain during the storms, said Mark Hodges, executive director of the commission.

 

 

Minneapolis Grain Exchange

  

MGE July wheat soared on short-covering and bull spreading, traders said. UBS and JPMorgan were noted as buyers of nearby July and sellers of new-crop September, they said.

 

MGE July wheat ended down 27 3/4 cents on the week. Floor trading was "brisk," a switch from recent quiet activity.

 

The daily trading limit for MGE wheat Monday will revert to the default level of 60 cents. The limit was temporarily expanded to 90 cents this week after nearby July fell the 60-cent limit.