US Wheat Review on Friday: Dips on profit-taking, but ends up on week

 

 

U.S. wheat futures extended losses Friday as traders took profits following recent rallies, with some analysts projecting that supportive short-covering has been exhausted for now.

 

Chicago Board of Trade December wheat closed down 6 1/4 cents at US$4.98 3/4 a bushel, up 30 3/4 cents on the week. Kansas City Board of Trade December wheat finished 7 1/2 cents lower at US$5.10 1/2, and Minneapolis Grain Exchange December wheat settled down 4 3/4 cents to US$5.26 1/2.

 

Wheat sagged along with neighboring CBOT corn and soy as the markets pulled back ahead of the weekend. The losses followed a setback Thursday and came as commodity funds sold an estimated 2,000 wheat contracts at the CBOT.

 

There are some ideas that technical buying and short-covering, which supported prices earlier this week, have run out of steam. However, non-commercial speculative funds continue to hold a large net short position in CBOT wheat.

 

"I think for now the short-covering rally that we've had has probably been exhausted," said Dale Durchholz, analyst for AgriVisor. "If you look at known fundamentals, it's called, 'There isn't much to get excited about.'"

 

It's well known that world wheat supplies are large. It seems as though that factor is dialed into the markets and cannot become any more bearish, Durchholz said.

 

The slow U.S. soy harvest is holding up soft red winter wheat seeding and sparking concerns that persistent delays could prompt producers to change their planting plans. Wet weather has prevented growers in the Midwest and Delta, who often plant wheat after soy, from bringing in their crop.

 

 

Kansas City Board of Trade

 

KCBT wheat sagged on profit-taking and pre-weekend positioning, traders said. The December contract closed up 25 1/2 cents on the week.

 

Export demand has been mixed this week, as the U.S. sold wheat to Iraq before getting snubbed by Egypt, analysts said. Weekly U.S. wheat export sales of 480,200 tonnes were within trade estimates.

 

Weekly export sales of hard red winter wheat, traded at the KCBT, were 104,400 tonnes, according to the U.S. Department of Agriculture. Sales of soft red winter wheat, traded at the CBOT, were weak at 36,800 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE December wheat ended up 22 1/2 cents on the week.

 

Sales of hard red spring wheat, traded at the MGE, were 155,300 tonnes. It seems as though buyers are looking toward higher protein wheat varieties for their U.S. purchases, a trader said.