June 30, 2006

 

US Wheat Review on Thursday: Ends up before USDA data, minneapolis grain exchange leads

 

 

U.S. wheat futures settled higher Thursday, led by gains in new-crop Minneapolis Grain Exchange spring wheat futures amid concerns that hot, dry weather across the U.S. Northern Plains spring wheat belt could further damage the already deteriorating wheat crop, brokers said.

 

"During the first part of July, the northern Plains will have hot and dry weather, with very stressful temperatures," DTN weather said Thursday. "Temperatures will range up to 100 degrees Fahrenheit Thursday, and will be only slightly less hot during the weekend (highs mostly in the 90s Fahrenheit). More hot weather is in store next week."

 

Gains in commodity markets ahead of Thursday's Federal Open Market Committee statement and ahead of Friday's quarter end; weekly U.S. wheat export sales of 542,200 metric tonnes; and short-covering before Friday's key June 1 U.S. wheat stocks and 2006 U.S. wheat acreage reports were also supportive, wheat brokers said.

 

The Federal Reserve on Thursday raised overnight target rates a 17th-straight time by one quarter point to 5.25% but stepped back from its pre-commitment to further rate increases.

 

Friday is also first notice day for deliveries against the three U.S. July wheat futures contracts, but brokers expected the new USDA wheat plantings and stocks data and U.S. spring wheat weather forecasts would take precedent in Friday's wheat trade.

 

CBOT September wheat settled up 7 cents at US$3.95 a bushel.

 

Speculative funds bought about 2,000 contracts after buying 1,200 lots by 1330 EDT, brokers said.

 

CBOT wheat spread trade included Citigroup's spreading of 300 December/December 2007 and ADM's spreading of 10 September/December, brokers said.

 

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

 

In overnight U.S. wheat export news, Japan bought 60,000 tonnes of U.S. wheat in its overall tender of 80,000 tonnes. Japan bought 16,000 tonnes of hard red winter wheat, 20,000 tonnes of western white and 24,000 tonnes of dark northern spring wheat.

 

In other global wheat news, the International Grains Council said it had raised its forecast for 2006-07 world wheat production by 4.1 million metric tonnes to 604.6 million metric tonnes.

 

Looking ahead to Friday's key USDA reports, analysts on average expected the government to report 2006 U.S. all-wheat plantings at 57.756 million acres, above the USDA's March estimate of 57.128 million acres and above the 2005 all-wheat plantings tally of 57.229 million acres.

 

U.S. 2006 spring wheat plantings were sen at 14.563 million acres, above the USDA's March 2006 spring wheat planting intentions estimate of 13.899 million and above last year's 14.036 million acres.

 

Analysts expected the government to report 2006 U.S. durum plantings at 2.030 million acres, above the March 31 U.S. durum plantings estimate of 1.825 million acres but below the 2005 U.S. durum wheat acreage figure of 2.760 million acres.

 

U.S. wheat supplies as of June 1 were seen, on average, at 548 million bushels, just above the June 9 USDA 2005-06 U.S. wheat ending stocks estimate of 547 million bushels and above the 2005-06 June 1 U.S. wheat stocks tally of 540 million bushels, analysts said.

 

They noted that the USDA has for the past five years in its June quarterly wheat stocks data reported a larger June 1 U.S. wheat stocks figure than that forecast in the USDA June crop report.

 

 

Kansas City Board of Trade

 

KCBT September ended up 8 cents at US$5.07 3/4 per bushel.

 

Fimat was an early buyer of July and seller of December, brokers said. ADM bought September while FC Stonnee bought July 2007 wheat futures.

 

Fimat spread 200 July/September and 200 September/December wheat.

 

KCBT traders said the Kansas City cash wheat basis was weak.

 

 

Minneapolis Grain Exchange

 

MGE September closed up 5 1/2 cents at US$4.87 1/2 per bushel.

 

Cash spring wheat basis bids were mixed Thursday, cash sources said.

 

Thursday's Minneapolis wheat receipts totaled 69 railcars versus last year's 187 railcars. There were zero durum receipts versus last year's 29 cars.