US Wheat Review on Thursday: Closes modestly lower in setback

 

 

U.S. wheat futures slipped Thursday in a setback from recent gains but closed above session lows amid some support from firm Chicago Board of Trade soy futures.

 

CBOT December wheat closed down 3 3/4 cents at US$5.62 1/2. Kansas City Board of Trade December wheat lost 4 1/4 cents to US$5.61, and Minneapolis Grain Exchange December wheat slipped 1 3/4 cents to US$5.68 1/2.

 

The markets extended losses from Wednesday amid the feeling that recent gains were overdone, traders said. CBOT wheat soared earlier this week and month on investment fund buying and technical buying.

 

Prices felt some follow-through technical pressure after CBOT December wheat on Wednesday was unable to penetrate a resistance level at the early August high of US$5.85 a bushel, said Dave Marshall, an independent marketing advisor and commodities broker. The contract on Wednesday hit a session high of US$5.83 1/2 in electronic trading.

 

CBOT wheat temporarily felt borrowed strength from a rally in neighboring CBOT soy Thursday but slumped when soy came off their highs, Marshall said. Soy ended firmer but off session highs on bullishness about demand.

 

Funds on Thursday sold an estimated 3,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat finished weaker on profit-taking and in a retreat from the recent rallies. The wheat markets continue to lack fundamental support, traders said.

 

Weekly U.S. wheat export sales of 362,400 tonnes were down 12% from last week and 13% from the prior four-week average, according to the U.S. Department of Agriculture. The sales were at the low end of trade estimates, which ranged from 300,000 to 500,000 tonnes.

 

"Dismal understates how bad it is," Marshall said about export demand.

 

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, bought 175,000 tonnes of Russian, French and German wheat in a tender but none from the U.S. U.S. wheat is priced too high to be competitive, traders said.

 

 

Minneapolis Grain Exchange

 

MGE wheat finished weaker with the other markets. The setback was not "unusual given the kind of recovery that we've had here recently," a broker said.

 

Activity remained choppy during the session. The markets traded both sides before settling lower.