US Wheat Review on Thursday: Ends up after hitting one-month highs

 

 

U.S. wheat futures ended solidly higher Thursday after hitting one-month highs on technical and speculative buying and support from other markets.

 

Chicago Board of Trade December wheat closed up 10 3/4 cents at US$4.74 a bushel. Kansas City Board of Trade December wheat gained 9 1/2 cents to US$4.89 3/4, and Minneapolis Grain Exchange, or MGEX, December wheat closed up 10 3/4 cents at US$5.06 1/4.

 

Strength in neighboring CBOT corn and soy and weakness in the U.S. dollar helped underpin wheat during the session, traders said. Commodity funds bought an estimated 4,000 wheat contracts at the CBOT.

 

CBOT December wheat in electronic trading reached a one-month high of US$4.83 a bushel before trimming gains. The neighboring corn and soy markets ended off their highs like wheat.

 

Wheat was "helped out by the fall crops being up," a broker said. "It's been helped out a lot by the U.S. dollar making a new low and staying quite a bit down. It's been helped out by the good export sales report."

 

Weekly U.S. wheat export sales of 767,300 tonnes for the week ended Oct. 1 topped expectations, which ranged from 400,000 tonnes to 600,000 tonnes. Sales were up 43% from the previous week and 52% from the prior four-week average, according to the U.S. Department of Agriculture.

 

"That's an improvement," the broker said. "We need to establish a trend of higher export sales now."

 

Competition for export business has been stiff this marketing year as there is a lot of wheat to go around on the world market. Large global supplies have been fundamentally bearish for prices.

 

 

Kansas City Board of Trade

 

KCBT December wheat pared gains after hitting a session high of US$4.99 1/2 in electronic trading. That was its highest price since Sept. 4.

 

Export demand and support from the falling U.S. dollar helped boost KCBT wheat, traders said. A soft dollar is seen as friendly because it makes U.S. grain more attractive to foreign buyers. Iraq bought 200,000 tonnes of U.S. wheat in a tender, according to a media report.

 

 

Minneapolis Grain Exchange

 

MGEX December wheat hit a session high of US$5.13, its highest price since Sept. 3, before trimming gains. It closed above US$5 for the first time in two weeks.

 

Traders are waiting for the USDA to issue its monthly supply and demand report at 8:30 a.m. EDT Friday. The average of analysts' pre-report estimates for 2009-10 carryout is 798 million bushels, up from the USDA's September estimate of 743 million, according to a Dow Jones Newswires survey of 14 analysts.