US Wheat Review on Tuesday: Slides in setback from Monday's strength

 

 

Lacking strong spillover support, U.S. wheat futures pulled back from Monday's gains Tuesday.

 

Chicago Board of Trade September wheat closed 7 cents lower at US$5.42 1/4 a bushel. Kansas City Board of Trade September wheat fell 6 cents to US$5.73, and Minneapolis Grain Exchange September wheat slipped 4 1/4 cents to US$6.20.

 

Wheat gave back less than half of Monday's gains as the markets retreated in a "Turnaround Tuesday" scenario, traders said. CBOT September wheat ended Monday up 21 cents.

 

Bearish fundamentals, including large global supplies and slow export demand, continue to hang over wheat, traders said. For now, the markets are mainly followers of CBOT corn and soys, an analyst said.

 

Strong spillover strength from neighboring and outside markets, which helped wheat rise Monday, was absent Tuesday, traders said. CBOT corn ended weaker, while soys finished mixed and outside markets failed to provide clear direction, they said.

 

"There's plenty of wheat around," the analyst said. "It's the tail of the dog. It's the tail of the corn and bean markets. It's pretty much just in a follower's role."

 

Commodity funds sold an estimated 4,000 wheat contracts at the CBOT.

 

CBOT September wheat traded an "inside day," with prices staying within Monday's open outcry range of US$5.57 to US$5.36. The contract's range Tuesday was US$5.51 to US$5.38 1/2.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower in a correction from Monday's strength, a trader said. The market was missing support from other markets, he said. A weak U.S. dollar and firm CBOT corn and soys helped propel prices Monday.

 

Grains will keep an eye on outside markets for direction Wednesday, including crude oil and the dollar, an analyst said. The Department of Energy is slated to release oil and product inventory data Wednesday, with increases in crude and some fuel stockpiles seen.

 

 

Minneapolis Grain Exchange

 

MGE wheat was a follower of the other markets but could see some support from demand later this month, a market analyst said. Demand for hard red spring wheat, traded at the MGE, could increase as harvest approaches and buyers look for high protein milling wheat, he said. HRS wheat is used to make bread.

 

The U.S. Department of Agriculture said 71% of the spring wheat crop was in good-to-excellent condition as of Sunday, down from last week's rating of 74%. The USDA said 3% of the crop was harvested, down from the average of 15%.