June 17, 2006

 

US Wheat Review on Friday: Ends mixed after choppy trading session

 

 

U.S. wheat futures ended mixed Friday after a choppy trading session, with spreading of July contracts into September noted before June 30, the first notice day for deliveries against the three U.S. July wheat futures contracts, brokers said.

 

Gains in Chicago Board of Trade soybean and corn futures amid concerning U.S. Midwest crop weather forecasts were supportive but offset by pressure from the advancing U.S. winter wheat harvest, brokers said.

 

"I didn't see anyone with a large sense of direction in today's trade," one CBOT wheat broker said. "We'll watch the weather - for CBOT corn and soybeans - for next week's market direction."

 

CBOT July wheat ended down 2 1/2 cents at US$3.59 and September closed up 1/4 cent at US$3.76 3/4 a bushel.

 

Speculative funds sold 2,100 CBOT wheat futures contracts by 1:30 p.m. EDT, brokers said. O'Connor sold 800 December, Citigroup sold a net 900 December and Term Commodities was a late buyer of September, they said.

 

In CBOT wheat spread trade, JP Morgan spread 800 September/July and USA Trading spread about 1,000 September/July, they added.

 

Midday spot U.S. HRW FOB bids rose 2 cents and spot SRW CIF bids were unchanged Friday, cash sources said.

 

 

Kansas City Board of Trade

 

KCBT July wheat closed down 1 1/2 cents at US$4.62 1/2 and September ended down 3/4 cent at US$4.72.

 

Spot cash 11% U.S. hard red wheat basis bids rose 3 cents Friday, 12% bids rose 7 cents; and 13% and 14% bids were unchanged, according to the KCBT.

 

"With a generally warmer and drier week next week across our hard red winter wheat states, I expect arvest to progress big time, bringing more cash pressure to futures," said Tim Hannagan, a grain analyst at Alaron Trading, on Friday. "Sell July CBT or July KC futures on a higher open Monday."

 

 

Minneapolis Grain Exchange

 

MGE July wheat closed down 1 cent at US$4.33 1/4 and September ended down 2 1/2 cents at US$4.42 3/4.

 

Cash spring wheat basis bids were mixed Friday, cash sources said. Minneapolis wheat receipts totaled 147 railcars versus last year's 47 railcars. There were 36 durum receipts versus last year's 58 cars.

 

Alaron's Hannagan noted that U.S. spring wheat weather forecasts would also continue to be closely watched, as 75% of the crop growing season lies ahead.

 

"This week's weather looked less than perfect so expects declines on Monday's update," Hannagan said, referring to Monday's crop progress report.

 

The U.S. Department of Agriculture last Monday reported 67% of the U.S. spring wheat crop was in good to excellent shape, down 2% from the previous week and 14% below last year's rating.

 

"Only 6% of the crop has the head developed, so weather's impact is not at its critical stage yet, but after a poor winter wheat crop, traders will be sensitive to spring wheat's condition," he added.