US Wheat Review on Tuesday: CBOT bounces from Monday's sell-off

 

 

U.S. wheat futures closed mixed Tuesday, as technical buying and short-covering propelled Chicago Board of Trade wheat higher after a sharp sell-off Monday.

 

CBOT September wheat rose 6 cents to US$8.64 3/4 per bushel. Kansas City Board of Trade September wheat slipped 2 cents to US$8.94 1/4, and Minneapolis Grain Exchange September wheat stumbled 9 1/2 cents to US$9.41.

 

CBOT wheat bounced after sliding into negative territory during the previous two days' sessions. Commodity funds bought an estimated 2,000 contracts.

 

"We had two big down days Monday and Friday," said Tom Leffler, owner of Leffler Commodities.

 

Concerns about U.S. harvest delays added some underlying support, Leffler said. The U.S. winter wheat crop was 36% cut as of Sunday, compared to 36% at the same time last year and the average of 48%, the U.S. Department of Agriculture said in its weekly progress report.

 

The northern third of Midwestern crop areas should remain dry into the weekend, although significant rainfall may hit the southern half of the region Thursday afternoon through Friday, according to a forecast from T-Storm Weather. The wet weather will continue to slow the soft red winter wheat harvest, the private weather firm said.

 

There was a general lack of other fresh, bullish fundamental news. Egypt bought 150,000 tonnes of wheat from Russia, Ukraine and Canada but none from the U.S.

 

 

Kansas City Board of Trade

 

KCBT wheat futures felt a bearish influence from modest losses in CBOT corn, a floor trader said. CBOT December corn fell 5 cents to US$7.52.

 

Harvest activity also should pick up in Kansas during the holiday weekend and next week, which could pressure prices, Leffler said. Temperatures across the central and southern Plains should be warmer than normal next week, especially across western areas where harvest is under way, T-Storm Weather said.

 

Heavy deliveries of 1,484 contracts against the KCBT July future were "a bit of a surprise," a trader said, and may have weighed on the nearby contract. Volume was "on the lighter side."

 

 

Minneapolis Grain Exchange

 

MGE wheat futures led the downside. It was seen as bearish that the USDA raised its good-to-excellent rating of U.S. spring wheat by 2 percentage points to 74%.

 

Trading activity at all three U.S. wheat exchanges is expected be slow Wednesday and Thursday ahead of the July 4 holiday, traders said. The exchanges are closed Friday but will trade normal hours in wheat Thursday.

 

"It will probably be kind of choppy until the three-day weekend is over," a trader said.