US Wheat Review on Tuesday: Falls on outside pressure, funds, harvest

 

 

Pressure from other markets, fund selling and active harvesting drove U.S. wheat futures lower Tuesday as the markets extended their steep downtrend.

 

Chicago Board of Trade September wheat fell 6 3/4 cents to US$5.12 1/2 a bushel. Kansas City Board of Trade September wheat dropped 7 cents to US$5.44, and Minneapolis Grain Exchange September wheat slipped 5 3/4 cents to US$6.06 3/4.

 

Wheat slumped in a late sell-off after "holding its own" for much of the day session in the face of heavy losses in CBOT soys, a trader said. Soys plummeted on long liquidation and pressure from weak outside markets.

 

Wheat has seen sharp losses lately and did not have room to pull back like soys, an analyst said. CBOT September wheat has lost nearly US$1.90 since hitting an eight-month high June 1.

 

"Corn and wheat took all of their profit out," the analyst said. "There's no place to find profits to take now other than in the bean market."

 

CBOT September wheat closed just above its open-outcry session low of US$5.12, which was a fresh contract low on the daily chart. Commodity funds sold an estimated 3,000 contracts at the CBOT.

 

Nearby CBOT July wheat fell 6 3/4 cents to US$4.83 3/4. That was the lowest price for a nearby contract on a monthly continuation chart since December.

 

 

Kansas City Board Of Trade

 

The ongoing U.S. winter wheat harvest weighed on prices as cutting continues, with favorable weather expected this week, traders said. Hedging pressure has been "steady" but not heavy at the KCBT, a floor trader said.

 

"It just feels like a liquidation of funds on top of harvest pressure," the trader said. "It's hard to keep things up when you've got this much negative news in the market."

 

World wheat supplies are considered adequate, and export demand has been lackluster lately.

 

 

Minneapolis Grain Exchange

 

MGE wheat slumped with the other wheat markets. Wheat is oversold and due for a bounce but could not hang on to slight gains, a trader said.

 

Losses in soys, crude oil and equities contributed to a bearish tonnee in wheat, traders said. Still, "we have taken a lot off the corn and the wheat since June 1," a trader said.

 

Traders are waiting to see U.S. Department of Agriculture production estimates, due in a crop report Friday. Production estimates will be issued for all-wheat, winter wheat, spring wheat other than durum and durum.