US Wheat Review on Thursday: Ends higher on spillover, but trims gains

 

 

Spillover support and technical buying lifted U.S. wheat futures Thursday, although the markets trimmed gains before the close.

 

Chicago Board of Trade September wheat finished up 9 3/4 cents at US$5.31 3/4 a bushel. Kansas City Board of Trade September wheat rose 6 3/4 cents to US$5.61 1/2, and Minneapolis Grain Exchange September wheat was up 2 cents at US$6.00.

 

Wheat followed CBOT corn and soys higher, traders said. Corn rallied on fund buying and expectations the U.S. Department of Agriculture will lower its acreage estimate when it issues a revised forecast next month, they said.

 

"If corn and beans are higher, we're not going to be lower," a CBOT wheat trader said.

 

Wheat was due for a technical bounce after recent losses, traders said. Commodity funds bought an estimated 4,000 contracts at the CBOT. CBOT September wheat closed below its open outcry session high of US$5.38.

 

In other news, a Commodity Futures Trading Commission subcommittee examining the lack of convergence in CBOT wheat is scheduled to hold its second public conference call from 3 p.m. to 5 p.m. EDT. The CFTC formed the Subcommittee on Convergence in Agricultural Commodity Markets to identify why cash prices and futures aren't converging as they're supposed to and to suggest solutions to the problem.

 

 

Kansas City Board of Trade

 

KCBT wheat rose on technical buying and borrowed strength from CBOT corn and soys, traders said. September wheat pared gains after hitting an open outcry session high of US$5.70.

 

Fundamentals for wheat continue to look weak, with world supplies considered ample. There was a lack of fresh news to change that bearish outlook, a trader said.

 

Weekly U.S. wheat export sales of 342,300 tonnes were toward the low end of trade expectations, which ranged from 300,000-550,000 tonnes. Of that total, sales of hard red winter wheat were 177,200 tonnes, sales of soft red winter wheat were 80,100 tonnes, and sales of hard red spring wheat were 50,200 tonnes, according to the U.S. Department of Agriculture.

 

 

Minneapolis Grain Exchange

 

MGE wheat ended higher with the other markets on technical buying and spillover support, a trader said. September wheat closed below its session high of US$6.09 3/4.

 

"The news seems so limited," an analyst said. "Exports are nothing to write home about"

 

Japan said it bought 108,000 tonnes of wheat, including 87,000 tonnes from the U.S., in a routine tender concluded Thursday. The shipment is expected to arrive Sept. 1-13.