US Wheat Review on Thursday: Tumbles on spillover pressure, Egypt snub

 

 

U.S. wheat futures closed sharply lower Thursday on pressure from other markets and a snub from Egypt, traders said.

 

Chicago Board of Trade September wheat closed down 28 1/2 cents at US$5.00 1/4 a bushel. Kansas City Board of Trade September wheat fell 26 1/4 cents to US$5.34, and Minneapolis Grain Exchange September wheat dropped 27 3/4 cents to US$5.79 1/4.

 

Strength in the U.S. dollar and falling CBOT corn and soys were bearish influences on wheat, traders said. Commodity funds sold an estimated 5,000 wheat contracts at the CBOT.

 

Weekly U.S. wheat export sales of 559,800 tonnes topped expectations and were seen as "good," an analyst said. However, Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, bought 210,000 tonnes of French and Russian wheat in a tender and none from the U.S.

 

"That didn't do anybody any favors," an analyst said of the Egyptian snub. "We need to see some monster sales to countries such as Egypt."

 

Egypt is a major wheat buyer on the world market and is known for being price sensitive. GASC bought Russian wheat, known for being inexpensive, despite a recent dustup over quality in which some Russian wheat was quarantined in Egypt.

 

"If we want business, we're going to have to run the price down," an analyst said of the U.S.

 

Bearishness about large world supplies added pressure to the markets, traders said. The U.S. Department of Agriculture is slated to issue updated U.S. and world production and carryout estimates Aug. 12.

 

 

Kansas City Board Of Trade

 

The firm U.S. dollar and losses in corn and soys dragged down KCBT wheat, traders said. Wheat continues to be the weak link in the grain and soy markets, they said. CBOT December corn ended down 16 3/4 cents, and November soys lost 15 cents.

 

Weekly sales of U.S. hard red winter wheat, traded at the KCBT, were seen as healthy, traders said. Of the total U.S. weekly sales, HRW wheat accounted for 235,700 tonnes, including 7,000 tonnes sold for delivery in 2010-2011, according to the USDA.

 

 

Minneapolis Grain Exchange

 

MGE wheat followed the other markets lower. Expectations for strong hard red spring wheat yields are seen as bearish, an analyst said.

 

"We've got a heavier spring wheat crop," he said. There is "no threatening weather for that spring wheat harvest and big yields expected."

 

Harvesting of HRS wheat, grown in the northern U.S. Plains, is expected to start later than usual this year because cool, wet weather delayed planting. The cool summer has helped the crop develop without stress and encouraged strong yield potential, industry members have said.