US Wheat Review on Wednesday: Slides on spillover selling from corn

 

 

U.S. wheat futures dropped Wednesday on spillover pressure from Chicago Board of Trade corn and bearishness about ample supplies, traders said.

 

Chicago Board of Trade September wheat closed down 13 1/2 cents at US$5.28 3/4 a bushel. Kansas City Board of Trade September wheat lost 12 3/4 cents to US$5.60 1/4, and Minneapolis Grain Exchange September wheat slid 13 cents to US$6.07.

 

Weakness in neighboring CBOT corn spilled over into wheat, as wheat has been taking direction from other markets lately, traders said. Commodity funds were sellers of the grains and unloaded an estimated 5,000 wheat contracts at the CBOT, they said.

 

Wheat continues to be the weak link in the grain markets, as corn ended down about 8 cents, an analyst said. Fundamentals for wheat look weak, as the world has more than enough supply to meet demand, he said.

 

On Thursday, traders will watch activity in neighboring and outside markets for leadership, an analyst said. They will also keep an eye on weekly U.S. wheat export sales data, due out from the U.S. Department of Agriculture at 8:30 a.m. EDT. Sales for the week ended July 30 are expected to be 350,000 tonnes to 550,000 tonnes. A week earlier, sales were 575,100 tonnes.

 

"I think it's very important that we see a good export sales numbers on tomorrow's report," a broker said. "Last week was better than it had been. We need that to keep improving or else the USDA is going to lower its export number on the supply/demand report, I'm afraid."

 

The USDA is slated to issue supply/demand and crop production reports Aug. 12.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended lower on spillover pressure from CBOT corn and a lack of supportive fundamentals, traders said. The fall extended losses from a weaker close Tuesday.

 

Traders said the markets should find some direction Thursday from the results of an Egyptian wheat tender. Egypt's state-owned General Authority for Supply Commodities said it was tendering to buy 55,000 to 60,000 tonnes of wheat on a free on board basis. Egypt, a major wheat buyer on the world market, last week bought 240,000 tonnes of French wheat and 55,000 tonnes of U.S. wheat in a tender.

 

 

Minneapolis Grain Exchange

 

Wheat remains a follower of CBOT corn and of the U.S. dollar, a trader said. Rainfall in the northern U.S. Plains is seen as beneficial for spring wheat, which could use a shot of moisture before harvest, he said.