US Wheat Review on Tuesday: Falls on corn pressure, acreage increase

 

 

U.S. wheat futures slumped Tuesday on pressure from limit-down corn and estimates for higher-than-expected plantings, although the markets trimmed gains from session lows.

 

Chicago Board of Trade September wheat closed down 17 cents at US$5.40 3/4 a bushel. Kansas City Board of Trade September wheat dropped 12 cents to US$5.80, and Minneapolis Grain Exchange September wheat lost 22 3/4 cents to US$6.33 3/4.

 

Selling from CBOT corn spilled over into wheat throughout the session as corn tumbled after the U.S. Department of Agriculture pegged plantings above trade expectations, traders said. The USDA's estimates for larger-than-expected all-wheat and spring-wheat plantings also were bearish, they said.

 

All-wheat plantings were pegged at 59.775 million acres, up from the USDA's March estimate of 58.638 million. The highest estimate in a Dow Jones Newswires pre-report survey of analysts was 58.8 million.

 

"We found an additional million acres of all-wheat acres," said Tom Leffler, owner of Leffler Commodities. "You've still got the harvest pressure too."

 

Winter-wheat cutting is active in the Midwest and Plains. The harvest was 40% complete as of Sunday, compared to the average of 46%, according to the USDA.

 

Commodity funds sold an estimated 4,000 contracts. CBOT September wheat recovered some losses after hitting an early session low of US$5.25, its lowest price since Dec. 5.

 

 

Kansas City Board of Trade

 

Pressure from the slide in corn weighed on KCBT wheat, along with the increased acreage estimate, Leffler said. Leffler said he was "shocked" by the acreage increases for corn and wheat.

 

"We shot over the top both in corn and in wheat," he said.

 

KCBT September wheat bounced a bit after hitting an open outcry session low of US$5.63 1/2. A broker said he recommended clients liquidate shorts following the heavy sell-off at the opening.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside. The USDA estimate plantings of spring wheat other than durum at 13.772 million acres, up from its March estimate of 13.304 million.

 

Traders had largely expected to see acres fall from March amid ideas that wet, cool weather had delayed seeding and caused some producers to forgo planting or switch acres to other crops. Producers in North Dakota, the top spring-wheat-growing state, planted spring wheat on 6.7 million acres, up 100,000 acres from the USDA's March estimate.

 

The North Dakota Wheat Commission was "surprised" at the increase but "pleased that producers still thought there was pretty good value in putting in wheat," marketing director Jim Peterson said. Hard red spring wheat, prized for its high protein content, is used to make bread.