US Wheat Review on Thursday: Closes slightly up as markets consolidate

 

 

U.S. wheat futures closed slightly higher Thursday as the markets consolidated after recent weakness amid a lack of strong leadership from other markets.

 

Chicago Board of Trade December wheat edged up 3 cents to US$4.96 1/2 a bushel. Kansas City Board of Trade December wheat gained 1 1/2 cents to US$5.15, and Minneapolis Grain Exchange December wheat rose 1/2 cent to US$5.51.

 

Wheat traded in a tight range, with the CBOT December contract hitting an electronic high of US$4.98 3/4 and a low of US$4.89 1/2. That was inside Wednesday's range of US$5.08 to US$4.85 1/2, which was a new contract low.

 

"I think today was just a quiet day," a trader said. "We kept the trend of making new lower lows every day from occurring."

 

There was a lack of supportive fundamental news or leadership from other markets, traders said. CBOT corn slipped, and soys ended mostly lower.

 

Weekly U.S. wheat export sales of 393,900 tonnes were toward the low end of analysts' estimates, which ranged from 350,000 to 550,000 tonnes. The market needs to see stronger demand to spark further gains, an analyst said.

 

Commodity funds bought an estimated 2,000 contracts at the CBOT.

 

 

Kansas City Board of Trade

 

Wheat is technically oversold and due for a bounce but was not going to rally without support from other markets, a KCBT trader said. In outside markets, there was "nothing much going on with the dollar," which traded both sides, along with crude oil, he said. KCBT wheat had "just really nothing to follow, with the outsides all quiet," the trader said.

 

It seemed as though the markets felt some lingering support from Wednesday's sale of 120,000 tonnes of U.S. wheat to Egypt, the trader said. Egypt booked the wheat in a tender as part of a larger purchase of 270,000 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE wheat trailed the other wheat markets during the session. Some traders are buying CBOT wheat and selling MGE wheat because the winter wheat harvest is over and the spring wheat harvest is just getting started, an analyst said. CBOT trades soft red winter wheat, and MGE trades hard red spring wheat.

 

Traders are looking ahead to the release of production estimates due out Friday from Statistics Canada. It wouldn't be surprising to see the estimate trimmed a bit due to cold weather or dryness, a CBOT trader said. The U.S. Department of Agriculture this month lowered its estimate for Canada's wheat crop to 22.5 million tonnes from its July estimate of 23.5 million.