US Wheat Review on Monday: Lower on technical selling, lack of buyers

 

 

U.S. wheat futures closed lower Monday on technical selling and a lack of buyers and fresh fundamental news, traders said.

 

Chicago Board of Trade September wheat was down 13 1/4 cents to US$7.97 3/4 per bushel. Kansas City Board of Trade September wheat was down 7 3/4 cents to US$8.24 1/2, and Minneapolis Grain Exchange September wheat was down 9 3/4 cents to US$8.76 1/4.

 

The market corrected after an overextended rally on Friday, traders and analysts said. After climbing in early trade Monday, a lack of follow-through buyers set the stage for the drop, traders said. An analyst said the correction brought prices to where they should have been Friday.

 

"It's kind of hard to find anything to get overly positive about with wheat," said Tom Leffler, owner of Leffler Commodities, based in Augusta, Kan.

 

Traders said there was little fundamental reason for the rally or the slump. Prices moved little during the second half of the trading day.

 

"It was not a big-volume rally and it's not a big-volume break. There's nothing behind it," a trader said.

 

Although Leffler didn't think Friday's rally was warranted, he said the market could have some upside movement soon.

 

"We are building a bottom in this wheat market, and I think it's something to keep an eye on because somewhere in there it will come out of this to the upside," he said.

 

Traders are "nervous" about a meeting of the Commodity Futures Trading Commission's Agricultural Advisory Committee scheduled for Tuesday, a trader said. The meeting will address a lack of convergence between cash and futures prices and is scheduled to last all day.

 

In other news, Morocco's state wheat buyer, the Office National Interprofessionnel des Cereales et des Legumineuses, said Monday it is tendering to buy 307,090 metric tonnes of soft milling wheat, of any origin, from importers inside the country. The wheat is for delivery starting Sept. 1 and will be distributed to 14 regions across the country, ONICL said on its Web site. The deadline for bids is Aug. 6.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended lower on pressure from CBOT wheat, a trader said.

 

"You kind of overreacted at the open to the upside, overreacted to the downside and sort of whipsawed it and kind of sat there for the rest of the day," a trader said.

 

The trader said he expects the market to trade for a while between US$8.07, which was last week's low, and US$8.66, the high from the previous week.

 

Expected support from corn and beans failed to materialize, he said. Traders added that reports that Iran plans to begin importing significant amounts of wheat was not as supportive as some have indicated.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures followed the other markets lower, a trader said. He said electronic trading supported an early rally but "evaporated" later on.

 

"We were kind of led by Kansas City early on, and just sort of fell apart later in the day," a trader said.

 

A U.S. spring wheat tour taking place this week will give the trade a look at the crop's improvement, and could move the markets depending on what news emerges from the tour, traders and analysts said.