US Wheat Review on Monday: Markets end mostly higher on short covering

 

 

A late bout of short-covering kicked U.S. wheat futures mostly higher Monday after all three markets spent most of the day in negative territory.

 

Chicago Board of Trade September wheat finished 1/2 cent higher at US$5.42 1/4 a bushel. Kansas City Board of Trade September wheat closed up 4 1/2 cents at US$5.71, Minneapolis Grain Exchange September wheat ended down 3 cents at US$6.13 1/4.

 

Trading during the session was mostly light. There was a "lack of volume, lack of fresh news and lack of enthusiasm," a trader said.

 

Wheat could see more support from short-covering as non-commercial speculative funds continue to hold a large net short position in CBOT wheat, an analyst said. Speculative funds were net short 53,353 contracts as of July 14, up from 50,363 contracts a week earlier, according to supplemental reports from the Commodity Futures Trading Commission.

 

Weakness in the U.S. dollar lent some support to the grains, traders said. A weak dollar makes U.S. wheat more attractive to foreign buyers.

 

Neighboring markets closed firmer, with nearby CBOT soys surging more than 20 cents. Commodity funds were seen as even in CBOT wheat.

 

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, said it was tendering for wheat, according to a report. Results of the tender could help five the markets direction Tuesday.

 

U.S. wheat has become competitive on the world market following a slide in prices June, analysts said. The markets can't rally too hard or the U.S. will price itself out of export business, they said.

 

 

Kansas City Board of Trade

 

A late short-covering rally pulled KCBT wheat into positive territory, a floor trader said. KCBT September wheat recovered after hitting an open outcry session low of US$5.60.

 

The market is expected to remain range-bound and choppy, traders said.

 

Traders are waiting to see the U.S. Department of Agriculture's crop progress report, due out at 4 p.m. EDT. The hard red winter wheat harvest should be at least 75% complete following a "very active" weekend of cutting in Colorado, a KCBT trader said.

 

 

Minneapolis Grain Exchange

 

MGE lagged in negative territory as CBOT and KCBT wheat recovered. Funds have less of a presence at the MGE than in the other markets.

 

The crop progress report will provide an update on the condition and development of U.S. spring wheat. A week ago, 71% of the crop was rated good-to-excellent, compared with 72% the prior week, and 57% was headed, down from the average of 83%.