US Wheat Review on Wednesday: Falls on firm dollar, funds, lack of news

 

 

Strength in the U.S. dollar and a lack of bullish news knocked down U.S. wheat futures Wednesday, with the nearby Chicago Board of Trade contract hitting a three-week low.

 

Chicago Board of Trade July wheat dropped 17 3/4 cents to US$5.96 a bushel. Kansas City Board of Trade July wheat lost 17 1/2 cents to US$6.48, and Minneapolis Grain Exchange July wheat slid 16 1/2 cents to US$7.26 1/2.

 

Commodity funds sold an estimated 4,000 contracts at the CBOT.

 

The markets gave back gains from Tuesday amid an absence of supportive news, traders said. U.S. Department of Agriculture crop data, issued Wednesday, was seen as neutral to bearish, they said.

 

The USDA raised its 2009-10 world ending stocks estimate to 182.7 million tonnes from its May estimate of 181.9 million and its U.S. ending stocks estimate to 647 million bushels from 637 million in May. The agency trimmed new-crop production forecasts, as expected.

 

Fundamentals for wheat remain weak amid sluggish export demand, an analyst said. CBOT July wheat hit an open outcry session low of US$5.92 1/2, its lowest price since May 21.

 

"There's a lot of wheat in the world," said Tom Leffler, owner of Leffler Commodities. "We're not exactly doing a great job of exporting it."

 

 

Kansas City Board of Trade

 

KCBT wheat sagged as USDA crop data didn't offer any real surprises to boost the market, traders said. Gains in the U.S. dollar added pressure after weakness in the dollar helped underpin gains Tuesday, they said.

 

"When you're sitting at the doorstep of harvest, you're going to have to have something price bullish to push prices up," Leffler said.

 

The pace of the U.S. hard red winter wheat harvest should pick up once warmer and drier weather hits the Plains, Leffler said. U.S. winter wheat was 5% cut as of Sunday, compared to the average of 10%, according to USDA.

 

 

Minneapolis Grain Exchange

 

MGE wheat slid with the other markets, but traders continue to monitor spring wheat production potential due to worries about unfavorable weather, an analyst said. Canada, a major spring wheat producer, has struggled with dryness in areas, while the U.S. northern Plains have been too wet and cold. The USDA lowered its estimate for Canada's production one million tonne from last month to 25 million.

 

MGE September wheat, which represents the new crop, closed down 17 cents at US$7.23 1/4.