Poultry
xClose

Loading ...
Swine
xClose

Loading ...
Dairy & Ruminant
xClose

Loading ...
Aquaculture
xClose

Loading ...
Feed
xClose

Loading ...
Animal Health
xClose

Loading ...
RSS
 
November 6, 2008

 

US Wheat Review on Wednesday: Tumbles on spillover pressure, setback

 

 

U.S. wheat futures sank Wednesday on spillover pressure and as the markets pulled back from a technical bounce earlier in the week.

 

Chicago Board of Trade December wheat closed down 35 1/4 cents at US$5.37 1/4 per bushel. Kansas City Board of Trade December wheat dropped 32 1/4 cents to US$5.76 3/4, and Minneapolis Grain Exchange December wheat sank 24 cents to US$6.44.

 

Losses in the neighboring CBOT soy and corn markets weighed on wheat, traders said. Weakness in equities and in crude oil added to the bearish tonnee.

 

There was a lack of fresh fundamental news to support wheat, traders said. The markets rose Monday and Tuesday on technical buying and short-covering.

 

"This is just proof that when you're rallying on no news you can break as easily on no news," a trader said.

 

The technical bounce ran out of steam, prompting the wheat markets to give back their gains, an analyst said. Commodity funds sold an estimated 2,000 contracts at the CBOT.

 

"Without fundamental support, we're kind of retracing gains," the analyst said.

 

Australia's government commodity forecaster cut its prediction for the 2008-09 wheat crop to 19.9 million metric tonnes, down some 11% from its last estimate in September. The decrease was not surprising to traders, as private estimates had already put the crop near or slightly below 20 million tonnes, an analyst said.

 

A lack of rainfall across Victoria, South Australia and southern New South Wales has hurt the crop, nearly halving expected wheat output in Victoria to 1.4 million tonnes, according to the Australian Bureau of Agricultural and Resource Economics, or Abare. The U.S. Department of Agriculture, which last month pegged production Down Under at 21.5 million tonnes, could lower its estimate in a crop report due out Monday to be more in line with Abare, analysts said.

 

 

Kansas City Board of Trade

 

KCBT wheat futures fell amid a lack of fundamental news, just as they rose Monday and Tuesday without fundamental news, a floor trader said. Neighboring and outside markets were weaker and did not offer wheat support, as they did earlier in the week, he said.

 

Optimism about the potential of a new president to revitalize the economy helped support commodities Tuesday, analysts said. Sen. Barack Obama was elected president, as many had expected.

 

"I think there was a lot of (people saying), "OK, the election's over... OK, what now?'" a KCBT trader said.

 

 

Minneapolis Grain Exchange

 

MGE December wheat closed near its session low of US$6.40 3/4. CBOT and KCBT wheat also finished near session lows, encouraging ideas that the markets will see follow-through selling Thursday, a trader said.

 

"You've got to like some more follow-though to the downside," he said.

 

Traders will review the USDA's weekly export sales data, due out at 8:30 a.m. EST Thursday. Analysts expect wheat export sales for the week ended Oct. 30 to be 300,000 tonnes to 500,000 tonnes.

 

Share this article on FacebookShare this article on TwitterPrint this articleForward this article
Previous
My eFeedLink last read