US Wheat Review on Monday: Mixed; bounce on short covering

 

 

U.S. wheat futures ended mixed Monday, with Chicago and Kansas City wheat managing to recover from early losses on speculative short covering.

 

December CBOT wheat ended 3 1/2 cents higher at US$4.98 3/4, December KCBT wheat settled 4 cents higher at US$5.20 3/4, and December MGE wheat finished 2 cents lower at US$5.38.

 

In CBOT pit trades, speculative fund buying was estimated at 3,000 lots.

 

Weakness in the U.S. dollar gave the market a boost in the absence of fresh supportive news, said Brian Hoops, president of Midwest Market Solutions.

 

This was a short covering bounce at best, as there is not enough export business around to mount a sustainable rally, Hoops said.

 

The combination of U.S. dollar declines, the unwinding of soy/wheat spreads and the stabilization of early losses in soy and crude oil opened the door for traders to even some positions.

 

Futures initially fell to new contract lows at all three U.S. wheat futures markets, but once the market satisfied a downside objective, selling dried up and traders started to buy back previously sold positions.

 

"The dollar helped the market, but that's not enough, as exports are about half of what they were last year, and that was a poor year for sales and shipments," Hoops said.

 

Ample world supplies continue to serve as an anchor to upside potential, with the harvesting of the U.S. spring wheat crop another defensive feature limiting advances. The progression of the spring wheat harvest and sluggish exports did not allow Minneapolis wheat to follow the rest of the complex higher, but the market did bounce well off its early lows, analysts said.

 

Otherwise, the market lacked any fresh fundamental features to drum up excitement, leaving futures in a choppy trend heading down the stretch.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report Monday, 4 p.m. EDT. Analysts expect spring wheat harvest progress near 40%, with ratings holding steady or declining as much as 2 percentage points.

 

 

Kansas City Board Of Trade

 

KCBT wheat futures settled higher, rebounding from early losses on speculative short covering.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended off its lows, but was unable to climb into positive territory, as the progressing spring wheat harvest and sluggish demand capped upside potential, analysts said.