US Wheat Review on Tuesday: Slips on spillover pressure, weak demand

 

 

Disappointing export demand and weakness in neighboring markets pressured U.S. wheat futures Tuesday.

 

Chicago Board of Trade September wheat closed down 7 1/2 cents at US$5.34 3/4 per bushel. Kansas City Board of Trade September wheat fell 5 1/4 cents to US$5.65 3/4, and Minneapolis Grain Exchange September wheat dropped 13 cents to US$6.00 1/4.

 

Demand for U.S. wheat remained light as Egypt's state-owned General Authority for Supply Commodities overlooked the U.S. in a tender and secured 60,000 tonnes of Russian wheat. Traders had expected to see Egypt buy from the U.S. or E.U.

 

It was a "big surprise" for Egypt to book Russian wheat after the countries squabbled over grain quality recently, according to a note from AgResource Co. The trade will closely watch execution and acceptance of the deal after the spat to see whether the Russian wheat meets Egyptian standards, the firm said in a note.

 

Fund selling and weakness in CBOT corn and soys added to the bearish tonnee in wheat, traders said. Commodity funds sold an estimated 2,000 wheat contracts at the CBOT.

 

"The wheat, the corn and the beans are still pricing in good weather," an analyst said.

 

 

Kansas City Board Of Trade

 

KCBT wheat gave back all its gains from Monday, when the September contract closed up 4 1/2 cents. The quiet export front and losses in CBOT corn and soys pressured the market, traders said.

 

Wheat should continue its range-bound trend, traders said. Fundamentals look bearish, but there is the potential for strength from short-covering, an analyst said.

 

The U.S. winter wheat harvest was 72% complete as of Sunday, on target with last year but down from the average of 77%, the U.S. Department of Agriculture said in its weekly crop progress report.

 

 

Minneapolis Grain Exchange

 

The condition of U.S. spring wheat, traded at the MGE, improved to 73% good to excellent as of Sunday from 71% a week earlier, the USDA said. The ratings for spring wheat, corn and soys were all steady or higher in the report.

 

The USDA said 84% of spring wheat was in the heading stage of development, compared to 93% last year and the average of 93%. Cool, wet weather in the spring pushed back planting and development, although a hotter trend is seen as mostly beneficial for the crop, a forecaster said.