US Wheat Review on Tuesday: Slips in setback from Monday's strength

 

 

U.S. wheat futures closed lower Tuesday in a setback from Monday's rally, with the markets giving back about half of their gains.

 

Chicago Board of Trade September wheat closed down 12 3/4 cents at US$5.30 a bushel. Kansas City Board of Trade September wheat lost 13 cents to US$5.58, and Minneapolis Grain Exchange, or MGEX, September wheat lost 7 3/4 cents to US$6.13 1/2.

 

Prices retreated after climbing Monday in a technical rebound from oversold conditions. CBOT September wheat pushed lower after it was unable to take out Monday's highs, a trader said.

 

The contract traded within Monday's range, hitting an open-outcry session high of US$5.43, below Monday's open-outcry high of US$5.43 3/4. On the screen, CBOT September wheat hit a high of US$5.44 1/2, below Monday's electronic high of US$5.44 3/4.

 

Speculative funds remain heavily short in CBOT wheat, so the market could find more support from short covering down the line, a trader said. However, fundamentals are not bullish, he said.

 

Global supplies are seen as adequate, and demand has been dragging. There are some production worries around the world, including dryness in Argentina and parts of the Black Sea region, but "there's still plenty of wheat to go around," the trader said.

 

Commodity funds sold an estimated 4,000 wheat contracts at the CBOT.

 

 

Kansas City Board Of Trade

 

KCBT wheat closed lower in a "Turnaround Tuesday" scenario after jumping Monday, traders said. The September contract traded an inside day, meaning it stayed within Monday's range.

 

There was a lack of fresh fundamental news for the markets, traders said. Wheat "has no story," one trader said.

 

The U.S. winter wheat harvest was 66% complete as of Sunday, compared to the five-year average of 69%, according to the U.S. Department of Agriculture. Cutting was 96% complete in Kansas, the top hard red winter wheat-growing state, compared to its five-year average of 95%.

 

 

Minneapolis Grain Exchange

 

MGEX wheat stumbled with the other markets in a turnaround from Monday's strength. The market saw the most modest losses of the three wheat exchanges after seeing the most modest gains Monday.

 

U.S. spring wheat was rated 71% good to excellent as of Sunday, down 1 percentage point from last week, the USDA said. North Dakota's crop was rated 86% good to excellent, up 2 percentage points from last week.