US Wheat Review on Thursday: End higher as dollar weakness sparks rally

 

 

U.S. wheat futures ended higher Thursday, reacting to supportive outside markets as weakness in the U.S. dollar produced broad-based commodity strength.

 

December CBOT wheat ended 9 cents higher at US$5.03 3/4, December KCBT wheat settled 5 3/4 cents higher at US$5.08, and December MGE wheat finished 4 3/4 cents higher at US$5.23 3/4.

 

In CBOT pit trades, speculative fund buying was estimated at 4,000 lots.

 

A lack of fresh supportive fundamental news kept attention on outside influences, and with macro markets providing a bullish commodity event, short position holders were presented with a reason to cover some recently sold contracts, a CBOT floor analyst said.

 

Spillover support from neighboring corn and soy aided the bullish cause, with consolidative action featured after the market's slide that produced losses of 47 3/4 cents in the December CBOT wheat future during the four previous trading days.

 

The wheat market was a follower once again as the market had little fundamental justification for an upward push, a CBOT floor analyst said. Lower than expected weekly export sales were a signal of sluggish demand, but the fundamental pressure failed to offset bullish outside forces, he added.

 

Traders expect futures to remain at the mercy of outside markets and movement in neighboring gains as bearish supply side fundamentals keep upside potential tied to outside forces.

 

The DTN Meteorlogix weather forecast said rain and thunderstorms this week in the Midwest and Delta will further delay soft red winter wheat planting.

 

In other news, a shipment of U.S. wheat held for extra testing at an Egyptian port has resumed unloading, a spokesperson at the international grain company Cargill Inc. said Thursday.

 

The shipment, being delivered by Cargill to Egypt's state wheat-buyer the General Authority for Supply Commodities, or GASC, wasn't allowed to complete discharging after an initial sample showed it contained more than the legal limit of seeds. However, following further tests, the shipment has been released and unloaded by a decision from the agriculture quarantine.

 

 

Kansas City Board Of Trade

 

KCBT wheat futures settled higher, energized by supportive outside market influences in the absence of fresh supportive fundamental news. Spread activity was a featured attraction, with FC Stonnee and ADM Investor Services buyers of the December/March spread while JPMorgan was reported on the other side of the spread, a KCBT trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended higher, following the lead of Chicago wheat. "The wheat gains were more of a dollar-driven rally, and without the large fund based in Minneapolis the market followed the movement of Chicago" and Kansas City, a cash-connected spring wheat trader said. Moderate volume was reported, with active spread activity, as commercial firms began to roll December positions to March contracts.