US Wheat Review on Thursday: Futures trade both sides, settle flat-lower

 

 

U.S. wheat futures traded both sides Thursday and finished flat-lower as the markets surrendered gains in late trading.

 

Chicago Board of Trade December wheat closed unchanged at US$5.31 3/4 a bushel. Kansas City Board of Trade December wheat slipped 1/4 cent to US$5.35, and Minneapolis Grain Exchange December wheat stumbled 2 1/4 cents to US$5.48 1/2.

 

Wheat pulled back ahead of the close and ended weaker with CBOT corn. Wheat is taking direction from corn and should continue to keep an eye on the neighboring market, said Larry Glenn, broker and analyst for Frontier Ag.

 

"You did see some wheat versus corn spreading today," he said.

 

Chatter in the markets indicated that the U.S. corn crop in some areas is struggling with vomitoxin, a fungal byproduct that can sicken humans and animals if ingested. The talk weighed on corn amid ideas it would cut demand for animal feed and helped lift other markets like CBOT soymeal on ideas that other products could be used as substitutes, a trader said.

 

Soft red winter wheat, traded at the CBOT, is used to make pastries and snack foods for humans and can also be used for animal feed. The most recent U.S. SRW wheat crop, harvested in early summer, had its own problems with vomitoxin, caused by rainy weather during development.

 

CBOT December wheat in electronic trading hit a session high of US$5.41 3/4 and a session low of US$5.22. Commodity funds seemed to peel back their buying in late dealings. They had bought an estimated 3,000 contracts around midday but were seen as buyers of just 1,000 contracts at the close.

 

 

Kansas City Board of Trade

 

Outside markets were sending bearish signals to the grains, but they didn't seem to have much impact, traders said. The U.S. dollar was firmer during the trading session, while crude oil prices sank.

 

Grain traders will watch for weekly U.S. export sales data at 8:30 a.m. EST Friday. Wheat export sales for the week ended Nov. 5 are expected to be 250,000 tonnes to 550,000 tonnes.

 

In other export news, Egypt bought 295,000 tonnes Russian wheat in tender and none from the U.S. The snub was not surprising because U.S. wheat is too expensive to be competitive on the world market, traders said.

 

 

Minneapolis Grain Exchange

 

MGE wheat finished slightly weaker. The market began to sag before the close while CBOT wheat was still in positive territory.

 

Glenn said he expected wheat to slip Friday as traders take profits ahead of the weekend. Fundamentals for wheat are unsupportive because world supplies are large and demand has been weak.

 

"We've had a pretty good rally up in that wheat market, so we're due to stall a little bit here and maybe back off a little bit," Glenn said.