US Wheat Review on Friday: Falls on profit-taking, harvest pressure

 

 

U.S. wheat futures closed lower Friday on harvest pressure and profit-taking after rallies earlier this week.

 

Chicago Board of Trade September wheat fell 30 3/4 cents to US$9.12 per bushel. Kansas City Board of Trade September wheat tumbled 27 1/2 cents to US$9.45, and Minneapolis Grain Exchange September wheat shed 17 1/2 cents to US$10.02 1/4.

 

The advancing winter-wheat harvest is seen as bearish because it means more supplies are coming online. Illinois' soft red winter wheat harvest is 50% to 60% complete near Nashville, Ill., in the southern part of the state, said Dave Marshall, an independent marketing advisor and commodities broker.

 

The U.S. Department of Agriculture will update its estimate on harvest progress Monday in the weekly crop progress report. The agency said harvest was 22% complete as of Sunday, below the average of 32%.

 

"We're right in the middle of harvest," Marshall said. "Particularly with the soft red contract, virtually everyone has reported good yields."

 

Traders took money off the table ahead of the weekend after prices climbed earlier this week. Short-covering and some unwinding of long corn/short wheat spreads supported the market for the previous three day sessions.

 

"I kind of thought wheat was on a pretty slippery slope with this recent rally," Marshall said. "The crop is right in front of us. Everybody's condition ratings have held up really well."

 

Commodity funds sold an estimated 2,000 contracts at the CBOT. Deliveries against CBOT July contract on first notice day Monday are estimated at about 750 to 1,800 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures pulled back from recent rallies ahead of the week along with CBOT wheat. Traders are waiting for the USDA to issue its June acreage and quarterly stocks report at 8:30 a.m. EDT Monday.

 

The average of analysts' estimates for all wheat plantings is 63.818 million acres, up slightly from the USDA's March estimate of 63.803 million, according to a Dow Jones Newswires survey of nine analysts. The average of analysts' estimates for wheat stocks as of June 1 was 278 million bushels, compared with 456 million on June 1, 2007, according to a survey of 13 analysts.

 

Grain markets will be more focused on government estimates for planted and harvested acreage of corn and soybeans than on data for wheat, analysts said. There is uncertainty about corn and soy acres following severe floods in the Midwest.

 

"I think wheat is just tied at the hip with corn right now," Marshall said.

 

Deliveries against KCBT July wheat are expected to be about 200 to 400 contracts, a floor trader said.

 

 

Minneapolis Grain Exchange

 

Profit-taking dragged MGE wheat futures lower, a floor trader said. The market has been acting like a "follower" lately, following CBOT wheat and corn, another trader said.

 

Despite the weaker close, the MGE "probably had more buying than we've had all week long," a trader said. Buying was mostly from domestic mills, which haven't priced much spring wheat since the former nearby March contract soared to an all-time high of US$25 earlier this year.

 

The average of analysts' estimates for spring wheat acres other than durum is 14.321 million, down from 14.333 million in March, while durum acres are seen at 2.616 million, down from 2.63 million in March.

 

MGE July wheat deliveries are seen at zero to 100 contracts.