US Wheat Review on Wednesday: Ends mostly higher in technical recovery

 

 

U.S. wheat futures finished mostly firmer Wednesday in a modest recovery from a series of sell-offs.

 

Chicago Board of Trade September wheat ended up 4 3/4 cents at US$5.17 1/4 a bushel. Kansas City Board of Trade September wheat gained 2 1/2 cents to US$5.46 1/2, and Minneapolis Grain Exchange September wheat fell 2 1/4 cents to US$6.04 1/2.

 

Wheat was in an oversold conditions and due for a corrective bounce after suffering steep losses during the past five weeks, a CBOT floor analyst said. CBOT September wheat topped US$7 a bushel June 1 but has since lost nearly US$1.85.

 

CBOT September wheat traded an inside day, staying within Tuesday's trading range of US$5.12 to US$5.24 1/2. The contract's range Wednesday was US$5.14 to US$5.22.

 

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

 

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities bought 55,000 tonnes of U.S. soft red winter wheat, traded at the CBOT, and 120,000 tonnes of French wheat in a tender. The sale was friendly, although it was for a modest amount, the floor analyst said.

 

"The Egypt thing gave us a little bit of hope - not much, but a little," a broker said.

 

Wheat will need to see an improved technical picture and stronger world demand before it finds solid legs to stand on, the broker said. It would be supportive to see stronger export demand for wheat from other countries, not just the U.S., he said.

 

The markets will get a sense of demand from the U.S. Department of Agriculture's weekly export sales report, due out at 8:30 a.m. EDT Thursday, an analyst said. Export sales for U.S. wheat for the week ended July 2 are expected to be 200,000 tonnes to 450,000 tonnes, analysts said.

 

 

Kansas City Board of Trade

 

KCBT wheat edged higher in a technical rebound to recent losses, a trader said. Gains were subdued due to the ongoing U.S. winter wheat harvest and the lack of strong demand, he said.

 

The Kansas wheat harvest is "entering its last days," with progress made on Tuesday despite spotty showers in northern areas Monday night, according to a report by growers' group Kansas Wheat. Cutting was 83% complete as of Sunday, according to the USDA.

 

 

Minneapolis Grain Exchange

 

MGE wheat slipped while the other wheat markets rose. Nearby MGE July wheat led the downside and fell 8 cent to US$6.01.

 

Traders are waiting to see the USDA's crop production report, which will include the first estimates on the other spring wheat crop and durum crop. The report is due out at 8:30 a.m. EDT Friday.

 

The average of analysts' estimates for 2009-10 production of spring wheat other than durum was 505 million bushels, compared to 547 million last year, according to a Dow Jones Newswires survey of 7 analysts. The range of analysts' pre-report estimates was 468 million to 546 million.