US Wheat Review on Monday: Slips on harvest, lack of solid spillover

 

 

U.S. wheat futures finished mostly lower Monday on the advancing U.S. harvest and a lack of strong spillover support.

 

Chicago Board of Trade July wheat shed 1/4 cent to US$8.66 1/4 per bushel, while Kansas City Board of Trade July wheat fell 11 cents to US$9.04. Minneapolis Grain Exchange July wheat rose 5 cents to US$10.98, and MGE September wheat slipped 6 cents to US$9.64.

 

Seasonal pressure from the U.S. winter wheat harvest weighed on wheat amid ideas that cutters will be able to make headway following wet weather last week, traders said. The U.S. Department of Agriculture is scheduled to issue an update on harvest activity in its weekly crop progress report, due out at 4 p.m. EDT.

 

The harvest is expected to be 27% to 29% complete. A week ago, harvest was 16% complete, compared to the average of 19%.

 

With harvest activity picking up, wheat will probably stay mostly range-bound in the near term, said Mike Zuzolo, analyst for Risk Management Commodities. Wheat will also keep an eye on the neighboring CBOT corn and soy markets for direction, he said.

 

Wheat has followed CBOT corn, in particular, lately, as both grains are used for animal feed. Corn ended modestly higher Monday and helped wheat trim losses during the session.

 

"It's probably going to follow the row crops more than anything," Zuzolo said about wheat.

 

There wasn't much fresh fundamental news out for wheat. Egypt's state-owned General Authority for Supply Commodities, or GASC, said Sunday it bought 90,000 metric tonnes of Russian wheat in a tender.

 

The purchase "left a bad taste in the wheat trade's mouth" because it came after GASC canceled a tender for wheat last week, citing high prices, Zuzolo said. The earlier cancellation showed GASC didn't feel as though supplies were so tight that it had to secure its needs right away, he said.

 

 

Kansas City Board of Trade

 

Hard red winter wheat harvesting in the U.S. southern Plains weighed on KCBT wheat futures, traders said. Hot weather is expected to hit the central and southern Plains during much of the next two weeks, which is "helpful to accelerate the remaining wheat maturation and to aid harvesting," T-Storm Weather said in a forecast.

 

 

Minneapolis Grain Exchange

 

MGE wheat ended mostly lower, following CBOT wheat. The market trimmed losses a bit on gains in corn and crude oil, a floor trader said.

 

There was "decent buying" of MGE wheat at session lows, a MGE floor trader said. Prudential bought 100 MGE July at the opening, helping support the nearby contract, he said. However, new-crop MGE September wheat should be considered the lead month, he said.