June 23, 2006

 

US Wheat Review on Thursday: Mostly lower, led by CBOT losses

 

 

U.S. wheat futures ended mostly lower Thursday, pressured by speculative-led sales in Chicago Board of Trade wheat and losses in precious metal markets as the dollar index set a seven-week high, brokers said.

 

"It was more a lack of buying interest than heavy selling," one CBOT wheat broker said, adding that Goldenberg Hehmeyer's sale of about 1,500 CBOT wheat futures brought the fund net sales' total Thursday to about 3,000 CBOT wheat futures contracts.

 

Net weekly U.S. wheat export sales of 316,200 metric tonnes met traders' expectations but were 31% below the previous week, brokers said.

 

Results of an Indian tender that closed this week for 2.2 million tonnes of wheat were awaited.

 

Statistics Canada reported 2006 all-wheat plantings of 26.492 million acres, up from its April estimate of 25.620 million and last year's 24.943; however, traders said they had anticipated more acres due to this spring's wheat prices.

 

StatsCan also reported Canada's 2006 spring wheat plantings at 20.424 million acres, up 14% from the 2005 tally.

 

CBOT September wheat ended down 7 cents at US$3.82 1/4 a bushel.

 

CBOT wheat futures spread trade was modest, but traders said they were expecting large deliveries to be posted on the June 30 first notice day for deliveries against July wheat.

 

Moreover, the CBOT July wheat futures contract is the last month to deliver CBOT SRW wheat against a contract that specifies five parts per million vomitoxin.

 

Vomitoxin, a product of Fusarium graminearum, or head scab, can sicken humans and animals.

 

Midday spot U.S. HRW Gulf barge bids rose 4 cents Thursday and spot U.S. SRW CIF bids were unchanged, cash sources said.

 

In overnight U.S. wheat export news, Japan bought 100,000 metric tonnes of wheat, including 60,000 tonnes of U.S. wheat, for Aug. 1-31 shipment.

 

In other global news, the European Union rejected the week's single bid to export free-market wheat.

 

European new-crop cash wheat futures were mostly steady Thursday, with the weekly tender results having no impact as the 2005-06 marketing year draws to a close.

 

Finally, India's government approved for wheat imports by private domestic companies - in addition to the government-owned State Trading Corp. - to rein in inflation, Finance Minister P. Chidambaram said Thursday.

 

 

Kansas City Board of Trade

 

KCBT September settled Thursday down 4 1/4 cents at US$4.87 1/4 per bushel.

 

This week's rain-led harvest delays in Kansas, the top U.S. winter wheat producer, and reports that the harvest was winding down limited losses in KCBT wheat, brokers said.

 

Spot cash 11% U.S. hard red wheat basis bids rose 5 cents Thursday, while bids for 12% through 14% HRW were unchanged, according to the KCBT.

 

 

Minneapolis Grain Exchange

 

MGE September closed down 2 1/4 cents at US$4.62 per bushel.

 

Losses were limited by this week's report of deteriorating U.S. spring wheat conditions, brokers said.

 

The USDA reported Monday a 7 percentage-point drop in the U.S. spring wheat crop's good-to-excellent condition rating to 60%.

 

Twenty-one percent of the U.S. spring wheat crop was headed.

 

Cash spring wheat basis bids were steady to 20 cents lower Thursday, cash sources said. Minneapolis wheat receipts totaled 219 railcars versus last year's 155 railcars. There were 33 durum receipts versus last year's 131 cars.