US Wheat Review on Wednesday: Ends firmer on technical buys, harvest delays

 

 

U.S. wheat futures rose Wednesday on technical buying and weather worries, including concerns about harvest delays in the central and southern Plains.

 

Chicago Board of Trade July wheat jumped 5 3/4 cents to US$9.04 per bushel. Kansas City Board of Trade July wheat leapt 6 1/4 cents to US$9.45 1/4, and Minneapolis Grain Exchange July wheat rose 5 cents to US$10.95.

 

Profit-taking trimmed gains in wheat ahead of the close, but short-covering was a supportive factor during the session amid jitters about the markets' potential to extend recent gains, an analyst said. Wheat looks technically strong following recent rallies, which have been supported by firm CBOT corn, he said.

 

Non-commercial speculative funds were net short 30,285 CBOT wheat futures and options as of June 10, according to the most recent supplemental Commodity Futures Trading Commission report, issued last Friday.

 

"The specs have been short and stayed short for some time," said Dave Marshall, an independent marketing advisor and commodities broker. "I think there's some nervousness in wheat, and I think there are some chart considerations. I've heard comments among some who say wheat is cheap compared to some of the others and certainly as a feed grain."

 

Spillover support from corn, which also is used for feed, helped push wheat higher. Corn continued to find strength from worries about yield and acreage losses due to Midwest floods.

 

Fears about dry weather in Australia and Argentina were seen as an underlying supportive factor for wheat, a trader said. Wheat in both countries "will see only minimal precipitation in the form of scattered light showers," DTN Meteorlogix said in a forecast.

 

Wheat will continue to "look over its shoulder" for direction from corn, an analyst said. The results of an Egyptian tender for at least 55,000 to 60,000 metric tonnes of wheat for shipment July 16-31 also will help give the markets direction Thursday, traders said.

 

 

Kansas City Board of Trade

 

Concerns about the slow pace of harvest in the Plains supported KCBT wheat futures, traders and analysts said. The market is nervous about the potential for untimely precipitation after heavy rains at harvest slashed the crop's output last year.

 

Parts of Oklahoma, Texas, Nebraska and Kansas saw scattered showers and thunderstorms Tuesday, according to Meteorlogix. Scattered showers and thunderstorms could hit the region later this week, mostly in western and southern areas, the private weather firm said

 

"We've virtually seen most everything come to a standstill from Wichita south into northern Oklahoma," said Tom Leffler, owner of Leffler Commodities, based in Augusta, Kan. "We really need some drying weather to get soil solid enough to support combines."

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended higher with CBOT and KCBT wheat, as the market continued to be a follower, a trader said. Short-covering was seen as supportive, he added.

 

The U.S. Department of Agriculture on Thursday is slated to issue its weekly export sales data. Wheat sales are expected to be 200,000 to 350,000 tonnes.