US Wheat Review on Thursday: Ends mixed; CBOT, Kansas City Board of Trade bounce from losses

 

 

U.S. wheat futures closed mixed Thursday after a choppy day, with Chicago Board of Trade and Kansas City Board of Trade wheat bouncing slightly from recent losses.

 

CBOT December wheat finished up 2 1/2 cents at US$4.58 3/4 a bushel, and KCBT December wheat added 1 cent to end at US$4.73 1/2. Minneapolis Grain Exchange December wheat was the laggard and finished down 2 cents to US$4.84 1/2.

 

The markets are short-term oversold and due for a rebound, but there isn't much hope for a "big bounce" because "fundamentals just aren't there to support it," a trader said. World supplies are considered large, and export demand has been uninspiring.

 

"A big bounce is a probably a little too much to hope for," the trader said.

 

The U.S. Department of Agriculture at 8:30 a.m. EDT (1230 GMT) Friday is due to issue crop production and supply/demand reports, which will be more important for corn and soy than for wheat, traders said. Major adjustments for wheat will likely be saved for the Sept. 30 small-grains report, they said.

 

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

 

 

Kansas City Board of Trade

 

Trading was "directionless" during the day session with very light volume in the pit, a KCBT trader said. Traders expect the USDA to increase its U.S. wheat carryout estimate from last month, but that wouldn't change wheat's fundamental storyline.

 

"You're still looking at global supply," the trader said. "Global supply is only getting bigger."

 

The average of analysts' estimates for 2009-10 ending stocks is 769 million bushels, up from the USDA's August estimate of 743 million, according to a Dow Jones Newswires survey of 14 analysts. Of those surveyed, five analysts predicted the USDA will keep its estimate unchanged and none said they expected to see a decline in carryout.

 

The USDA also is slated to issue its weekly export sales report at 8:30 a.m. EDT Friday. Export sales for wheat are expected to be 300,000 tonnes to 500,000 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE wheat lagged behind CBOT and KCBT wheat throughout the day session. Expectations for a big U.S. spring wheat crop weighed on the market, traders said.

 

Early reports from the harvest indicate the USDA will eventually need to raise its estimate for spring wheat production, an analyst said. Harvest is progressing slower than normal this year because the crop was planted late in the spring.