US Wheat Review on Wednesday: Trims gains after setting new weekly highs

 

 

U.S. wheat futures closed higher Wednesday on short-covering but trimmed gains after scoring fresh highs for the week.

 

Chicago Board of Trade September wheat closed up 4 3/4 cents at US$5.34 3/4 a bushel. Kansas City Board of Trade September wheat edged up 2 1/2 cents to US$5.60 1/2, and Minneapolis Grain Exchange September wheat gained 5 1/2 cents to US$6.19.

 

Wheat looks as though it's trying to put in a seasonal bottom after falling hard in recent weeks, an analyst said. However, it will be difficult for prices to rally because world supplies are comfortable and demand has been lackluster, analysts said.

 

CBOT September wheat faltered after setting a fresh open-outcry weekly high of US$5.48, a trader said. That topped the previous weekly high of US$5.43 3/4.

 

It's not encouraging that the market has been unable to push above major moving averages, a trader said. CBOT September wheat is above its 10-day moving average but retreated after approaching its 20-day moving average, which sits near US$5.48 1/2.

 

Weakness in the U.S. dollar was seen as friendly for the markets, as it makes U.S. wheat less expensive for foreign buyers. Crude oil and equities were up, but CBOT corn and soys ended weaker. Commodity funds bought an estimated 3,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat ended higher on technical buying and support from outside influences, such as the weak dollar, traders said. The market bounced after prices slid Tuesday in a setback from strong gains Monday.

 

Traders are mindful that prices can't rise too much or export demand may suffer, a trader said. Egypt, a price-conscious buyer, has booked small amounts of U.S. wheat in recent weeks, which was seen as encouraging for demand.

 

KCBT September wheat hit a fresh open-outcry high for the week of US$5.75, exceeding the previous weekly high of US$5.73.

 

 

Minneapolis Grain Exchange

 

MGE September wheat hit a fresh weekly high of US$6.26 1/2, topping its previous high for the week of US$6.23 3/4. The contract is up 16 1/4 cents on the week so far.

 

Weather looks "generally favorable" for developing spring wheat in the northern U.S. Plains, Cropcast Agricultural Weather said in a forecast. Temperature and rainfall levels should remain near normal, the private weather firm said.