US Wheat Review on Friday: Retreats on spillover; lack of direction

 

 

U.S. wheat futures stumbled Friday, following the lead of neighboring corn and soy futures in the absence of fresh fundamental news to direct prices.

 

December CBOT wheat ended 4 1/2 cents lower at US$4.57 1/4, December KCBT wheat settled 2 1/4 cents lower at US$4.72, and December MGE wheat finished 3 3/4 cents lower at US$4.96 3/4.

 

In CBOT pit trades, speculative fund selling was estimated at 2,000 lots.

 

The market was in a consolidation mode, after previously giving back gains from an early week rally.

 

The fundamentals of the market remain the same, with ample world wheat supplies and sluggish U.S. export demand serving as bearish features limiting upside potential, said Shawn McCambridge, senior grains analyst with Prudential Bache in Chicago.

 

News that Brazil was inspecting U.S. wheat imported into the country for vomitoxin was another bearish influence hanging over the market as well, McCambridge said.

 

Light speculative-fund short covering and spread unwinding enabled Chicago and Kansas City wheat to gain against Minneapolis wheat during the day.

 

Nevertheless, the inability of the market to generate a strong export demand base is the key factor keeping a defensive trend in the market. U.S. wheat exports are at a disadvantage to other world exporters when freight is added into the equation, and unless exporters want to offer supplies at a discount, export demand struggles, McCambridge said.

 

Otherwise, light hedge-related selling managed to add some pressure amid selling ahead of an active spring wheat harvest weekend.

 

The DTN Meteorlogix weather forecast said maturing crops and crop harvest in the spring wheat areas will benefit from mostly above-normal temperatures and little rainfall during the next week, although the region may turn briefly cooler and a little wetter early next week.

 

 

Kansa  City Board of Trade

 

KCBT wheat futures ended lower Friday, struggling to generate lasting momentum in the absence of fresh fundamental news. Activity was light, with prices hovering within narrow trading ranges, a KCBT trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended lower, succumbing to hedge-related selling ahead of an active harvest weekend. Corrections in inter-market spreads opened the door for traders to take profits on spreads heading into the weekend, analysts said.