US Wheat Review on Monday: Markets see highest close since early August

 

 

A selloff in the U.S. dollar and money flowing into commodities pushed U.S. wheat futures to their highest closing levels since early August.

 

Chicago Board of Trade December wheat settled up 23 1/4 cents at US$5.62 1/4 per bushel. Kansas City Board of Trade December wheat climbed 19 3/4 cents to US$5.60 1/4, and Minneapolis Grain Exchange December wheat jumped 18 1/2 cents to US$5.74 1/4.

 

The markets closed near their highs as the dollar index, which tracks the greenback's moves against a trade-weighted basket of six currencies, sank to its lowest level since August 2008. CBOT December wheat in electronic trading hit a session high of US$5.64, its highest price since Oct. 23.

 

CBOT December wheat closed at its highest price since Aug. 4. It's supportive that the contract finished above its 200-day moving average around US$5.61, but the market is technically overbought, an analyst said.

 

Strength in crude oil and precious metals and in neighboring CBOT corn and soy added to the bullish tonnee, traders said. Commodity funds bought an estimated 5,000 wheat contracts at the CBOT.

 

The rally extended wheat's recent gains. As of Monday's close, CBOT December wheat was up 68 cents for the month.

 

Non-commercial speculative funds remain net short in CBOT wheat, which leaves the market vulnerable to short-covering, a trader said. The funds were net short 35,144 contracts as of Nov. 9, up from 33,477 contracts as of Nov. 3, according to a supplemental Commitments of Traders report from the Commodity Futures Trading Commission.

 

 

Kansas City Board Of Trade

 

KCBT December wheat closed at its highest price since Aug. 5. The contract finished near its session high of US$5.62, its highest price since Oct. 23.

 

Traders will take a look at the U.S. Department of Agriculture's weekly crop progress report, due at 4 p.m. EST. The USDA is expected to issue updates on U.S. winter wheat planting, emergence and condition ratings. Plantings should be wrapping up, and the crop has "plenty of moisture," an analyst said.

 

 

Minneapolis Grain Exchange

 

MGE December wheat closed at its highest level since Aug. 12. The contract finished below its session high of US$5.75, its highest price since Oct. 23.

 

Prices have climbed lately, even though global ending stocks are large and demand hasn't been overly impressive. Weekly U.S. wheat export inspections, announced Monday, were within trade estimates at 15.047 million bushels.

 

There is stiff competition for export sales on the world market due to comfortable supply levels. Recent rallies have made U.S. wheat less competitive for export business, traders said.