US Wheat Review on Thursday: Drops on spillover pressure, fund selling

 

 

U.S. wheat futures finished near session lows Thursday and extended losses for the week amid pressure from other markets and fund selling.

 

Chicago Board of Trade September wheat dropped 6 1/2 cents to close at US$5.29 a bushel, down 34 cents on the week. Kansas City Board of Trade September wheat fell 9 1/4 cents to US$5.64 1/4, down 35 3/4 cents on the week. MGE September wheat sank 11 cents to US$6.22 1/2, down 44 3/4 cents on the week.

 

Weakness in CBOT corn and soys and strength in the U.S. dollar set a bearish tonnee for wheat, traders said. Losses accelerated heading into the close, with CBOT September wheat settling 1 cent above its open outcry session low.

 

Commodity funds sold an estimated 3,000 wheat contracts at the CBOT.

 

There was a "general uneasiness to want to come" into the markets ahead of the three-day holiday weekend, said Jason Britt, president of Central State Commodities. The CBOT, KCBT and MGE are closed Friday in honor of Independence Day.

 

CBOT September wheat has support in the area from US$5.25-US$5.30, Britt said. There is an "unwillingness to really want to press down" below that area, he said.

 

 

Kansas City Board of Trade

 

The ongoing U.S. winter wheat harvest continued to weigh on prices, despite forecasts for rain to slow cutting in parts of the U.S. Plains, an analyst said. There are ideas the markets are carving out early harvest-time lows.

 

Wetness in the Plains could delay cutting, "but the weather's been pretty favorable up to this time," Britt said. The forecasts for rain were not too concerning because they didn't look like the beginning of an extended rainy pattern, he said.

 

KCBT September wheat closed 1 cent above its session low.

 

 

Minneapolis Grain Exchange

 

September wheat closed above its session low of US$6.18 1/4.

 

MGE wheat led the downside ahead of the long weekend. World wheat supplies continue to look adequate, which is bearish, and weather for spring wheat looks favorable, a trader said.

 

Private analytical firm Informa Economics estimated 2009 production of U.S. spring wheat other than durum at 502 million bushels and durum production at 88 million, traders said. The firm pegged U.S. all-wheat production at 2.134 billion bushels, up from the U.S. Department of Agriculture's June estimate of 2.016 billion. The USDA is slated to issue updated crop production estimates, including its first estimates on spring wheat production, at 8:30 a.m. EDT on June 10.