US Wheat Review on Tuesday: Slips on outside markets, setback
U.S. wheat futures closed lower Tuesday in a setback from gains Monday, but trading was range-bound as the markets looked for direction.
Most active Chicago Board of Trade March wheat fell 4 cents to US$5.52 3/4 per bushel. Kansas City Board of Trade March wheat dropped 4 1/4 cents to US$5.79 3/4, and Minneapolis Grain Exchange March wheat lost 6 1/4 cents to US$6.14 1/4.
The markets slipped late on profit-taking and in a retreat from Monday's rally, which was supported by gains in crude oil and equities, a trader said. Weakness in crude oil was a bearish influence on the grains Tuesday, said Dave Marshall, an independent commodity broker and analyst.
Wheat, corn and soybeans lately have been watching the outside markets, including crude oil, for direction amid worries about the health of the economy. Crude oil is linked to the grains because funds often trade in a basket of commodities and because corn is used to make ethanol.
"Outside markets continue to be a feature," Marshall said. "With crude oil having a little softness today, I think that made it more difficult for the market to want to rally."
CBOT March wheat traded from US$5.47 per bushel to US$5.60, inside of Monday's trading range. Wheat remains in a months-old sideways trend, traders said.
Nearby CBOT December wheat closed down 3 1/2 cents at US$5.34 after hitting an open outcry session high of US$5.41. The contract has support at US$5 and encounters technical resistance in the area of US$5.40 to US$5.80, Marshall said.
"It's really just within a trading range from yesterday," a broker said. "We didn't have any new information so we couldn't go higher, couldn't go lower."
Kansas City Board of Trade
KCBT wheat closed lower as traders booked profits after Monday's rally, a trader said. Market participants were trading the December/March spread ahead of first notice day Friday, he said. KCBT December wheat closed down 6 1/2 cents at US$5.62 1/4.
There should be some positioning Wednesday ahead of first notice day for the December futures contracts, Marshall said. The CBOT, KCBT and MGE are closed Thursday for Thanksgiving and have an abbreviated trading session Friday.
"I think people are in a holiday mood," Marshall said. "I think you'll continue to see this choppy trade."
Minneapolis Grain Exchange
MGE December wheat led the downside and closed down 10 cents at US$6.05 3/4. Trading was mostly quiet ahead of the Thanksgiving holiday, a trader said.
In export news, Japan said it won't hold its weekly wheat import tender this week but did not explain why. Last week, Japan bought 91,000 tonnes of U.S. wheat in a tender.