US Wheat Review on Tuesday: Ends mostly down after trading both sides

 

 

U.S. wheat futures traded both sides Tuesday and closed mostly lower in a small setback from a rally Monday.

 

Chicago Board of Trade December wheat slipped 1 cent at US$5.15 3/4 per bushel. Kansas City Board of Trade December wheat ended unchanged at US$5.20, and Minneapolis Grain Exchange December wheat fell 2 cents to US$5.29.

 

Gains on Monday were seen as "overdone," but wheat felt some spillover support from strength in neighboring CBOT corn and soy, traders said. January soy climbed 12 1/2 cents, while December corn rose 7 3/4 cents.

 

Commodity funds sold an estimated 2,000 wheat contracts at the CBOT. They were buyers in corn and the soy complex.

 

Wheat was "showing its true colors" by trailing corn and soy, as fundamentals aren't supportive for wheat, a CBOT floor trader said. World supplies are considered large, and export demand for U.S. wheat has been lackluster.

 

"You've got to point to the world stocks," an analyst said. "We are wallowing in it."

 

Bearishness about large world supplies is well known and factored into the markets, an analyst said. The markets will likely consolidate in the near term, he said.

 

 

Kansas City Board of Trade

 

Nearby KCBT December wheat closed flat, while deferred contracts were slightly higher. The market felt some spillover support from rising corn and soy, but the firm U.S. dollar was a bearish influence, an analyst said.

 

The U.S. Department of Agriculture said late Monday that U.S. winter wheat planting remains behind schedule, although comfortable global supplies prevent the delay from becoming too worrisome, an analyst said. U.S. winter wheat was 79% planted as of Sunday, down from the average of 90%, and 64% emerged, below the average of 75%, according to the USDA.

 

The crop was rated 64% good to excellent, up two percentage points from the previous week. That is a "very good crop rating this early, giving it some room for error in the growing season," according to a note from PFG Best.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower on profit-taking after Monday's rally, an analyst said. There was a lack of fresh news or demand to stir up excitement, he said.

 

Wheat in general should take direction from CBOT corn and soy in the near term, analysts said. The row crops have found support from U.S. harvest delays due to wet weather.