US Wheat Review on Wednesday: Stumble; continues correction phase

 

 

U.S. wheat futures ended lower Wednesday, continuing its correction from prior gains on an absence of fresh supportive news to underpin prices.

 

December CBOT wheat ended 8 1/2 cents lower at US$4.94 3/4, December KCBT wheat settled 8 1/4 cents lower at US$5.02 1/4, and December MGE wheat finished 7 1/2 cents lower at US$5.19.

 

In CBOT pit trades, speculative fund selling was estimated at 3,000 lots.

 

The market had little justification for its recent rally, and without some fresh fundamental support, futures are correcting to more realistic price levels, analysts said.

 

The market is effectively ringing out excesses, with market fundamentals suggesting a near-term top that was long overdue has been established, said John Kleist, broker/analyst with Allendale Inc.

 

Spillover weakness from neighboring grain and soy futures aided the declines, with strength in the U.S. dollar producing broad-based commodity weakness a bearish influence as well.

 

Without the support of corn or soy or outside markets, wheat's bullish legs had little support to attract buyers to the market.

 

U.S. wheat futures were initially higher in choppy early trade as the market attempted to stabilize from its correction from Friday's highs. However, the advances were short-lived, with Price Futures Group Vice President Jack Scoville saying "any rally attempt for now may not go real far as there appears to be plenty of supply to meet any new demand."

 

Improved soft red winter wheat planting weather in the forecast for next week helped tame bullish enthusiasm as well.

 

The DTN Meteorlogix weather forecast said moderate to heavy thunderstorms are on tap for major U.S. winter wheat areas the next couple of days. Some strong winds or locally severe weather will bring on delays in field work and planting. The weather beyond this system looks more favorable for planting and pre-winter development, Meteorlogix said.

 

In other news, Egyptian authorities took a second sample from a U.S. wheat shipment Wednesday after a first sample showed more than the legal limit of seeds, a government source said. "The shipment had 996 seeds per kilogram," said the official, who declined to give his name. "The maximum number of seeds permitted per kilogram is 25 seeds."

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report Thursday at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimate wheat sales for the week ended Oct. 22 to be in a range of 400,000 to 600,000 metric tonnes.

 

 

Kansa City Board of Trade

 

KCBT wheat futures ended lower, keeping pace with the defensive tonnee filtering through the U.S. wheat complex.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended lower, adding to the corrective setback amid a lack of fresh fundamental support to offset bearish momentum in the market, analysts said.