US Wheat Review on Friday: Markets continue to hit new contract Lows

 

 

U.S. wheat futures set fresh contract lows Friday and closed near session lows on lackluster export demand and spillover pressure from neighboring markets.

 

Chicago Board of Trade December wheat ended 7 cents lower at US$4.71 3/4 a bushel, down 23 1/2 cents on the week. Kansas City Board of Trade December wheat was down 9 1/4 cents at US$4.90, and Minneapolis Grain Exchange December wheat was down 7 1/4 cents at US$4.98 1/2.

 

CBOT December wheat in electronic trading hit a new contract low of US$4.71, below the previous low of US$4.75 1/4, set Thursday. The market has notched a string of contract lows in recent weeks amid bearishness about sluggish demand and large world supplies.

 

Wheat extended losses heading into the long Labor Day weekend as there was an absence of news about export demand, traders said. Competition for export business has been strong this marketing year because plenty of countries have wheat to sell.

 

"We've got to get these exports going up or we have to assume [the U.S. Department of Agriculture] will start trimming back their export forecast," said Dan Manternach, agriculture-services director for Doane Advisory Services.

 

Losses in neighboring CBOT corn and soy added pressure to wheat, analysts said. Commodity funds sold an estimated 2,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT December wheat set a fresh contract low of US$4.90, below its previous contract low of US$4.97. The contract ended down 26 3/4 cents on the week.

 

Weakness in CBOT corn and soy didn't provide any help to wheat, an analyst said. Losses in the neighboring markets kept potential buyers from stepping up, he said.

 

"It's really the other two that are a drag on wheat," the analyst said.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside Friday and suffered the heaviest losses for the week. MGE December wheat closed down 41 1/2 cents on the week.

 

Advancing U.S. harvest pressure and expectations for a big U.S. spring wheat crop are weighing on prices, analysts said. Warm weather next week is expected to be favorable for harvest and late-maturing plants, forecasters said.

 

"With harvest up in the northern plains, you really don't have much weather risk anymore at this juncture," an analyst said.