August 1, 2008
US Wheat Outlook on Friday: Steady to slightly higher; lack of news
U.S. wheat futures are expected to open steady or slightly higher Friday, as the market continues to struggle for direction amid a lack of fundamental news.
Chicago Board of Trade wheat is called steady to 2 cents higher. In overnight trading, September wheat was up 3 1/2 cents to US$7.87 1/4 per bushel, December wheat was up 3 1/2 cents to US$8.12 1/4 and March wheat was down 1 3/4 cents to US$8.30.
A trader said volume has been low because of the lack of news and choppy trading. Trading could remain light ahead of the weekend, he said.
"You want something that's trending, and really we've just been consolidating downward," a trader said.
The market has closed lower every day this week so far. Prices were higher most of Thursday, but fell late in the day on end-of-month liquidation, traders said.
This week's wheat crop tour provided few surprises to move the market, traders said.
Strong yields in eastern areas offset damage caused by dryness in wheat fields in western parts of North Dakota, scouts on the Wheat Quality Council's Hard Spring & Durum Wheat Tour said Thursday.
The tour calculated the average 2008 hard red spring wheat yield at 37.7 bushels per acre, up from the 2007 average of 37.3 bushels.
The average durum yield was estimated at 23.7 bushels per acre, below the 29 bushels predicted the previous year. Citigroup analyst Terry Reilly said the actual durum yield would likely be higher. The tour has underestimated durum yields at least three times in recent years, he said, and the USDA's July estimate was for 34.8 bushels per acre.
Reilly said he expected Minneapolis Grain Exchange prices to climb versus CBOT prices in the coming weeks, due to lower durum and spring wheat production estimates.
Strong world export demand is supporting the market, analysts said, although some add that there is a lot of competition for the business, which may limit the support for U.S. prices.
Recent rains in western Australia are seen as bearish for the market, traders and analysts add.
