US Wheat Review on Tuesday: Slips as markets consolidate after losses

 

 

U.S. wheat futures closed slightly lower Tuesday after trading both sides in choppy, consolidative activity, analysts said.

 

Chicago Board of Trade December wheat closed down 1 1/4 cents at US$4.98 1/4 a bushel. Kansas City Board of Trade December wheat fell 2 cents to US$5.14 1/2, and Minneapolis Grain Exchange December wheat ended down 3/4 cent at US$5.53 1/4.

 

The markets "got really quiet" after setting fresh contract lows on Monday, said Tom Leffler, owner of Leffler Commodities. CBOT December wheat on Tuesday hit a session low of US$4.95 3/4 in electronic trading, just above Monday's electronic contract low of US$4.92 1/2.

 

The markets are technically oversold and due for a bounce after recent losses, traders said. Non-commercial speculative funds continue to hold a large short position in CBOT wheat, which should eventually open the door for a short-covering bounce, Leffler said.

 

"Somewhere down the road, that will make a difference in the market," he said about the spec funds' short position.

 

However, wheat will have trouble sustaining strength because world supplies are considered large and there is "nothing to get excited about," Leffler said. The markets should continue to keep an eye on CBOT corn and soys for direction, he said.

 

"I think at the moment we are a follower," Leffler said about wheat. "If we see something rally the corn or soys, I think the wheat will benefit from it."

 

Commodity funds sold an estimated 1,000 contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat slipped in choppy activity, as traders were met with a quiet demand front, a market analyst said. The wheat markets could find some direction Wednesday from the results of an Egyptian tender, he said.

 

Egypt's state-owned wheat buyer said after the close of trading that it was tendering to buy wheat, traders said. The U.S. has not made major sales to Egypt this summer, with the most recent tender being filled by French and Russian wheat.

 

Recent moisture in the U.S. Plains has been "beneficial" ahead of winter wheat planting and provided a "good seedbed to get into," Leffler said. Eastern Kansas and eastern Nebraska may see heavy thunderstorms Tuesday night, according to private weather firm T-Storm Weather. Soil moisture should be "at least marginally decent" when seeding begins next month, the firm said.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower with the other markets. Spring wheat should struggle for the rest of August because harvest is beginning amid expectations for a big crop, an analyst said.

 

The U.S. Department of Agriculture on Monday rated U.S. spring wheat 74% good to excellent as of Sunday, up two percentage points from a week earlier. Harvest was 13% complete as of Sunday, compared to the average of 48%.