US Wheat Review on Monday: Resumes slide after Friday bounce

 

 

U.S. wheat futures resumed their slide Monday amid pressure from large world supplies and a lack of supportive news, traders said.

 

Chicago Board of Trade December wheat closed down 13 1/4 cents at US$4.54 a bushel. Kansas City Board of Trade December wheat fell 10 1/4 cents to US$4.67 1/2, and Minneapolis Grain Exchange December wheat lost 9 1/4 cents to US$4.84 3/4.

 

The markets were unable to extend gains from Friday, when CBOT December wheat closed higher after touching new a contract low. They followed the path of least resistance, which is to the downside, amid a lack of fresh fundamental news, an analyst said.

 

CBOT December wheat flirted with its contract low but did not set a fresh low. The contract's session low was US$4.52, compared with Friday's contract low of US$4.51.

 

Large world wheat supplies continued to hang over the markets, traders said. The U.S. Department of Agriculture, in a supply/demand report issued Friday, raised its projection for world wheat ending stocks, which confirmed bearishness about comfortable supplies, they said.

 

"We just didn't find anything that was a surprise on the friendly side," an analyst said about the report.

 

Commodity funds sold an estimated 2,000 contracts.

 

Trading was quiet to start off the week. CBOT September wheat expired without any fireworks down 10 3/4 cents at US$4.31.

 

Traders have been watching the September contract amid continued complaints about a lack of convergence between cash markets and futures. The markets are supposed to converge, or come together, when futures go into delivery to facilitate hedging, but cash prices have sagged below futures.

 

 

Kansas City Board of Trade

 

KCBT wheat gave back Friday's gains and more because there was nothing to justify pushing prices higher, a trader said. Talk about a U.S.-China trade dispute caused some earlier talk in agricultural markets, as China is a major importer of U.S. soy, he said. China does not import or export much wheat.

 

In other news, weekly U.S. wheat export inspections of 21.505 million bushels were "solid" and above expectations of 11 million to 19 million, a trader said. Still, export demand has been sluggish this marketing year and needs to pick up to boost prices, an analyst said.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower with the other wheat markets. Traders are keeping an eye on the advancing spring wheat harvest, which is progressing more slowly than normal this year after the crop was planted late in the spring.

 

The U.S. Department of Agriculture is slated to issue its weekly crop progress report at 4 p.m. EDT, which will include an update on spring wheat cutting. A week ago, harvest was 58% complete, below the average of 88%.