US Wheat Review on Wednesday: Ends lower on corn, crude pressure

 

 

U.S. wheat futures finished lower Wednesday, with the markets following a late slide in Chicago Board of Trade corn into negative territory.

 

Chicago Board of Trade September wheat fell 13 1/2 cents to US$7.83 1/4 per bushel. Kansas City Board of Trade September wheat slipped 12 cents to US$8.12 and Minneapolis Grain Exchange September wheat shed 10 cents to close at US$8.65.

 

Wheat closed weaker after trading near unchanged shortly before the close. Before its setback, wheat trimmed heavy early losses on short covering. The session low for CBOT September wheat was US$7.75 1/2.

 

Weakness in crude oil was seen as bearish for the grains, along with strength in the U.S. dollar index, traders said.

 

"Wheat right now just looks like a follower to me," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage. "It's trading on the fundamentals of corn and beans and crude."

 

Wheat is "definitely" in an oversold condition, Pfitzenmaier said. Moving forward, the market's activity will continue to be influenced by corn, and the unwinding of some intermarket spreads may have an effect on prices, an analyst said.

 

Wheat has a seasonal tendency to trade higher at this time of the year following the U.S. winter-wheat harvest. Commodity funds sold an estimated 3,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat futures followed CBOT corn lower late in the session, traders said. The weakness in crude oil added to the bearish tonnes, they said.

 

Increases in global ending stocks will continue to keep a lid of rallies moving forward, analysts said. However, the market is due for a rebound after recent setbacks, they said.

 

The U.S. Department of Agriculture at 8:30 a.m. EDT Thursday is slated to issue its weekly export-sales report. Wheat sales for the week ended July 17 are expected to be 400,000 to 750,000 tonnes.

 

 

Minneapolis Grain Exchange

 

The weakness in crude oil and corn weighed on MGE wheat, traders said. MGE wheat was seen as a follower of the other markets.

 

The U.S. spring wheat harvest "is nearly upon us and that should start to work its way into the market in a week or two," according to a market comment from Country Hedging. Outlooks for the crop are improving thanks to recent rains in the U.S. Northern Plains, an analyst said.

 

Scattered to widely scattered thundershowers are a midweek weather feature in the Northern Plains through the Canadian Prairie, specifically in central and southern Alberta and much of Saskatchewan, DTN Meteorlogix said. Rainfall maintains favorable conditions for crops, except for possibly in parts of far northern Alberta and Montana, where it has been trending too dry, the firm said.