US Wheat Review on Friday: Ends flat after touching new contract lows

 

 

U.S. wheat futures closed near unchanged Friday after nearby contracts touched fresh lows in early dealings, with short-covering helping the markets shake off losses, traders said.

 

Chicago Board of Trade September wheat closed up 1/4 cent at US$4.81 3/4 per bushel, down 7 3/4 cents on the week. Kansas City Board of Trade September wheat finished unchanged at US$5.08 1/2, and Minneapolis Grain Exchange September wheat slipped 1 1/4 cent to US$5.49 1/4.

 

Wheat was technically oversold and due for a bounce after recent losses, an analyst said. However, fundamentals look weak as ending stocks are large and the U.S. is lacking strong export demand from major buyers like Egypt, they said.

 

The U.S. Department of Agriculture this week raised its estimates for U.S. production and carryout and confirmed perceptions of large world supplies. That has left the markets drifting and looking for direction, an analyst said.

 

"Overall wheat lacks a story or theme," Macquarie Bank said in a research note.

 

Before recovering, CBOT September wheat in open outcry trading dropped to a contract low of US$4.76, below its previous low of US$4.77, set Wednesday. The contract hit a session high of US$4.84 1/2. Commodity funds bought an estimated 1,000 contracts.

 

 

Kansas City Board Of Trade

 

KCBT September wheat in open outcry trading hit a contract low of US$5.01 1/2, below its previous low of US$5.08 1/2, before bouncing. The contract closed down 16 3/4 cents on the week.

 

There was positioning ahead of the weekend, traders said. The firm U.S. dollar and losses in CBOT corn and soys hung over the markets as bearish influences, they said.

 

 

Minneapolis Grain Exchange

 

MGE wheat continued to lose ground to the CBOT and KCBT after the USDA pegged spring wheat production above expectations on Wednesday. MGE September wheat ended down 24 cents on the week.

 

Harvest of hard red spring wheat, grown in the northern U.S. Plains, has begun and is expected to ramp up during the coming weeks. HRS wheat is used to make bread.

 

The USDA on Monday will issue an update on harvest activity in its weekly crop progress report. As of Sunday, 8% of the crop was cut, down from 15% last year and the average of 31%. Cool summer weather and late planting delayed development and pushed back harvest.