US Wheat Review on Friday: Extends losses on US harvest, weak soy

 

 

U.S. wheat futures extended recent losses Friday on spillover pressure and a lack of fundamental support.

 

Chicago Board of Trade September wheat dropped 4 3/4 cents to US$5.84 1/2 a bushel, down 28 3/4 cents on the week. Kansas City Board of Trade September wheat lost 4 1/4 cents to US$6.25 1/4, and Minneapolis Grain Exchange September wheat slid 7 cents to US$6.95 3/4.

 

The advancing U.S. winter wheat harvest and large global wheat ending stocks were seen as fundamentally bearish for the markets. It's tough to rally in the face of growing supplies, an analyst said.

 

Nearby CBOT July wheat has shed 57 1/2 cents since the U.S. Department of Agriculture raised its new-crop ending stocks estimates June 10. The contract ended down 5 cents at US$5.55 1/4 after hitting an open outcry session low of US$5.54, its lowest price since May 6.

 

Although the markets ended weaker, they are considered oversold and there are ideas liquidation may have run "a big part of its course already," an analyst said. CBOT July wheat has lost more than US$1.15 since hitting an eight-month high June 1.

 

Overall, market activity was choppy and "lackluster" during the session, a trader said. The markets took "a bit of a breather" after leading the downside recently, a broker said. Commodity funds sold an estimated 3,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT September wheat finished down 28 3/4 cents on the week. The market stumbled amid expectations that winter wheat cutting will advance in the U.S. Plains this weekend thanks to a warm-up in temperatures, traders said.

 

"It's moving," a Kansas-based broker said about harvest.

 

Spillover pressure from heavy losses in CBOT soys weighed on the grains, an analyst said. November soys tumbled 37 1/2 cents.

 

 

Minneapolis Grain Exchange

 

MGE September wheat, which represents the new hard red spring wheat crop, ended down 30 1/2 cents on the week.

 

MGE led the downside in wheat after private analytical firm Informa Economics estimated other spring wheat was planted on 13.4 million acres, which is 100,000 acres more than the USDA estimated in March. Informa's forecast was "pretty contrarian" to widespread ideas that planting delays prompted producers to seed less spring wheat, a market analyst said.

 

Informa's estimate may be too high, but spring wheat plantings will still be around 13.3 million, he said. The USDA is set to issue fresh acreage estimates June 30.

 

Hedging volume was particularly light this week, the analyst said. Market participants aren't interested in making more sales as planting is finished and futures prices have been retreating, he said.