US Wheat Review on Wednesday: Mixed; short-covering in oversold market

 

 

U.S. wheat futures ended mixed Wednesday, but managed to finish near session highs on speculative short-covering attributed to oversold market conditions, analysts said.

 

September CBOT wheat ended 1/4 cent higher at US$5.66, September KCBT wheat settled 1/2 cent lower at US$6.33 1/2 and September MGE wheat finished 3/4 cent higher at US$7.06 3/4.

 

A quiet news front and the absence of clear directives from outside financial markets allowed futures to find underlying buying amid perceptions that recent declines had left the downside movement a little overdone, analysts said.

 

Choppy activity was featured, with harvest-related pressure and favorable spring wheat conditions limiting advances, while a lack of fresh supportive news kept a lid on the upside movement, a CBOT floor analyst said.

 

Heavy bearish commercial option plays weighed on upside opportunities as well, traders said.

 

The market had very little features, with a choppy tonnee in the U.S. dollar index translating into a lack of firm direction in commodities.

 

The theme is expected to continue, with traders taking a cautious approach unless a big financial and fundamental event emerges to spark trader interest, analysts said.

 

In CBOT pit trades, speculative fund buying was estimated at 1,000 lots.

 

The DTN Meteorlogix weather forecast said maturing wheat and the wheat harvest in the southern Plains will benefit from a drier, hotter weather pattern. However, there still may be some thunderstorm activity from time to time over the central and northern hard red winter wheat areas.

 

Meanwhile, in the Northern Plains crop areas, heavy storms near Bismarck, N.D., during the past couple of days have caused some severe flooding in the area. Spring wheat elsewhere in the region benefits from warmer temperatures and continued scattered shower activity during a 10-day period, Meteorlogix said.

 

On tap for Thursday, the U.S. Department of Agriculture's weekly export sales report will be released at 8:30 a.m. EDT, and analysts surveyed by Dow Jones Newswires estimate wheat sales for the week ended June 11 in a range of 200,000 to 400,000 metric tonnes.

 

 

Kansa City Board of Trade

 

KCBT wheat futures were slightly lower in what traders said was a pretty quiet, choppy trading session. A mixed tonnee in the U.S. dollar index during the day promoted the choppy theme, with the absence of fresh fundamental news keeping attention on fund activity tied to outside financial markets, analysts said.

 

 

Minneapolis Grain Exchange

 

MGX wheat futures ended narrowly mixed, as the absence of any outside market or fundamental features left futures in a consolidative mode. "Wednesday's session was one of the quietest days seen in a while, with mixed views in outside markets and a lack of market news not providing any strong market directives, a Minneapolis broker said.