July 4, 2007

 

US Wheat Review on Tuesday: Settles mixed amid absence of fresh news

 

 

U.S. wheat futures finished mixed Tuesday, with pressure seen from a lack of fresh news and sharp declines in neighboring markets, floor traders said.

 

Chicago Board of Trade September wheat slipped 1/4 cent to US$5.83 a bushel, while CBOT December wheat ended down 1/2 cent at US$5.97.

 

Kansas City Board of Trade September wheat rose 1/2 cent to US$5.85, and KCBT December wheat finished flat at US$5.98 1/2. Minneapolis Grain Exchange September wheat settled 2 3/4 cents lower at US$6.02 1/4, and MGE December wheat closed 1 cent lower at US$6.09.

 

Funds sold an estimated 1,500 contracts at the CBOT. In pit trades, RJ O'Brien sold 500 September. Fimat bought 500 December, and Man Financial bought 300 December.

 

Wheat futures stayed in negative territory for most of the day session amid spillover selling from CBOT corn and soybeans, which slid to double-digit losses, traders said. Negative technical momentum also continued to press on wheat after weak closes on Monday and Friday, they added.

 

There was no fresh news out to feed the bulls and push prices higher, an analyst said. Still, long-term fundamentals, including historically tight 2007-08 global ending stocks and production threats remain supportive, he said.

 

The U.S. Department of Agriculture on Monday afternoon issued its weekly crop progress report, although it didn't impact trading much, a CBOT floor broker said. The USDA's good-to-excellent rating for U.S. winter wheat stayed unchanged at 48%.

 

As of Sunday, 40% of the winter wheat crop had been harvested, down from 62% last year and the five-year average of 54%, according to the USDA. Harvest in soft red winter wheat states, such as Illinois and Indiana, is on target with five-year averages, while hard red winter wheat states, such as Kansas and Oklahoma, continue to lag sharply behind average.

 

"Crop progress was in line with expectations," the CBOT floor broker said. "It didn't give us much direction either way."

 

Liquidation of some long MGE/short CBOT spreads and long KCBT/short CBOT spreads gave CBOT prices a boost, a CBOT floor trader said. There was also some light bargain buying in late trading, he said.

 

There wasn't much trading interest in general going into the July 4 holiday, traders said. The CBOT, KCBT and MGE will be closed Wednesday in observance of Independence Day.

 

 

Kansas City Board of Trade

 

Hard red winter wheat harvest delays due to wetness are "old news" and not impacting the market anymore, a KCBT floor trader said.

 

Kansas' wheat crop was 59% harvested as of Sunday, down from 93% last year and the five-year average of 82%, according to the USDA. Oklahoma's harvest was 59% done, down from 99% last year and the five-year average of 96%.

 

The "chronic pattern" of thunderstorms in the Southern Plains shows a notable tendency of diminishing during the rest of this week, according to DTN Meteorlogix. Showers will occur in the southeastern sector of the region through Thursday, and a few thunderstorms will dot the northern and central areas, the weather firm said.

 

Mainly dry weather and above-normal temperatures will cover the most-active wheat harvest area of Kansas, Colorado and Nebraska during the weekend, Meteorlogix said. The warmer, drier trend will favor harvest progress, the firm said.

 

 

Minneapolis Grain Exchange

 

In its weekly crop progress report, the USDA kept good-to-excellent spring wheat condition ratings unchanged at 79%. Minnesota dropped four percentage points in its good-to-excellent rating because of a lack of moisture, an analyst said. South Dakota's good-to-excellent rating declined by six percentage points.

 

The USDA said 61% of the crop was headed, up from 33% last week and the five-year average of 49%.

 

"Dry conditions prevailed throughout most of the region over the last week and high temperatures into the 90s helped advance crop maturity," the North Dakota Wheat Commission said Tuesday. "Spotty rain showers did provide precipitation in some areas, but soil moisture conditions continue to decline from week to week."

 

Moisture levels don't seem to be much of a concern right now, but precipitation may be needed if the higher than normal temperatures continue, the commission said.