US Wheat Review on Friday: Rises on short-covering, strong neighbor markets
Short-covering and gains in neighboring markets helped wheat rally into the weekend amid a lack of fresh fundamental news.
Chicago Board of Trade September wheat Friday closed up 8 1/2 cents at US$5.41 3/4 a bushel, up 23 cents on the week. Kansas City Board of Trade September wheat ended up 7 cents at US$5.66 1/2, and Minneapolis Grain Exchange September wheat added 1 1/4 cent to US$6.16 1/4.
Wheat pushed higher after early weakness as CBOT soys soared and corn firmed, traders said. Wheat has the potential to see more upside from short-covering, as speculative funds continue to hold a large net short position in CBOT wheat, they said.
The Commodity Futures Trading Commission said Friday in a supplemental Commitments of Traders report that non-commercial speculative funds were net short 53,353 contracts in CBOT wheat as of July 14. A week earlier, speculative funds were net short 50,363 contracts.
Commodity funds bought an estimated 3,000 wheat contracts at the CBOT on Friday.
The higher close capped a week of choppy, back-and-forth trading in the markets. Wheat closed higher Monday, lower Tuesday, higher Wednesday and lower Thursday. The markets will likely remain range-bound, with CBOT September wheat trading between US$5.10 and US$5.60, an analyst said.
Kansas City Board of Trade
Technical buying and the rally in soys boosted KCBT wheat, traders said. There was a lack of fresh fundamental news out for the markets, they said.
There is a "waning of our usual harvest pressure" as winter wheat cutting winds down, an analyst said. Wheat has a seasonal tendency to rally as harvest moves into its final stages.
KCBT September wheat ended up 19 cents on the week.
Minneapolis Grain Exchange
MGE wheat continued to trail the winter wheat markets and ended slightly higher on the day. MGE felt borrowed strength from the short-covering rally at the CBOT, a trader said.
MGE September wheat closed up 13 1/2 cents on the week.
