US Wheat Review on Tuesday: Extends slide, hits contract lows

 

 

U.S. wheat futures settled near session lows Tuesday after tumbling to contract lows on bearishness about sluggish export demand and large world supplies, analysts said.

 

Chicago Board of Trade December wheat ended down 12 3/4 cents at US$4.59 a bushel. Kansas City Board of Trade December wheat lost 12 cents to US$4.78, and Minneapolis Grain Exchange December wheat sank 10 1/4 cents to US$4.88 1/4.

 

Wheat continued its downtrend amid a lack of fresh news about export demand, which started off slowly this marketing year, analysts said. There is plenty of wheat in the world and plenty of competition for export business, they said.

 

CBOT December wheat hit a contract low of US$4.57, below its previous low of US$4.71, set Friday. Nearby September wheat closed down 12 1/2 cents at US$4.31 1/2, the lowest price for a nearby contract on a monthly continuation chart since April 2007.

 

"There isn't anything on the flip side at the moment to fight the erosion in wheat," said Dale Durchholz, an analyst for AgriVisor.

 

Increased production estimates from France's Agriculture Ministry reinforced perceptions that world supplies are large, Durchholz said. Soft wheat production in France, the European Union's largest producer of wheat, will increase 1.1% this year to 37.3 million tonnes, and its hard wheat crop by 2.1% to 2.2 million tonnes, according to the data.

 

 

Kansas City Board of Trade

 

KCBT December wheat in electronic trading fell to a contract low of US$4.75, below its previous low of US$4.90. KCBT September wheat hit a low of US$4.65, the lowest price for a nearby contract on a monthly continuation chart since May 2007.

 

Wheat sank despite gains in neighboring CBOT corn and soy and weakness in the U.S. dollar, traders said. A weak dollar is generally seen as supportive because it makes U.S. wheat more attractive to foreign buyers.

 

Traders are starting to look ahead to U.S. Department of Agriculture crop reports due out Friday, although the reports will be more important for corn and soy than for wheat. There should be some positioning later in the week heading into the report, an analyst said.

 

 

Minneapolis Grain Exchange

 

MGE December wheat hit a contract low of US$4.82, below its previous low of US$4.96 1/4. September wheat hit a low of US$4.71 1/2, the lowest price for a nearby contract since April 2007.

 

Expectations for big spring wheat yields in the northern U.S. Plains continue to hang over the market as harvest advances, an analyst said. The USDA is slated to issue an update on harvest progress at 4 p.m. EDT in its weekly crop progress report.