US Wheat Review on Tuesday: Falls on fund selling after choppy trade

 

 

U.S. wheat futures closed weaker Tuesday on fund selling and profit-taking after trading both sides in choppy activity.

 

Chicago Board of Trade March wheat settled down 4 3/4 cents at US$5.84 per bushel. Kansas City Board of Trade March wheat fell 3 1/2 cents to US$5.71 1/2, and Minneapolis Grain Exchange March wheat dropped 3 cents to US$5.84 3/4.

 

Commodity funds at the end of the session were seen as sellers of about 4,000 CBOT wheat contracts, a trader said. They had been buyers of about 3,000 contracts around midday, he said.

 

A setback in neighboring CBOT soy was another bearish influence, traders said. Soy were strong in early dealings and had offered spillover support to wheat, they say. January soy closed down 1 cent at US$10.59 1/2, below a session high of US$10.78 1/2.

 

CBOT March wheat hit a session high of US$5.98 in electronic trading before the market backpedaled. There was room for trader to take money off the table after CBOT March wheat ended November up 74 3/4 cents on the month, a trader said. Neighboring CBOT corn also finished lower Tuesday.

 

There was a lack of fresh fundamental news for the wheat markets, traders said. The fundamental story remains the same, with world supplies seen as large and export demand seen as sluggish.

 

 

Kansas City Board of Trade

 

KCBT wheat settled lower after trading both sides. The market stumbled despite weakness in the U.S. dollar, which is often seen as a supportive influence because it makes U.S. wheat more attractive to foreign buyers.

 

Some traders saw wheat as "short-term overbought" and due for a pullback following recent rallies, a trader said. The wheat markets each finished up more than 15 cents Monday.

 

In other news, the U.S. Department of Agriculture dropped its good-to-excellent rating for winter wheat 1 percentage point from last week to 63%. The crop overall is still in "good" shape heading into the winter, an analyst said.

 

 

Minneapolis Grain Exchange

 

Strength in MGE wheat eased as funds sold CBOT wheat and as soy faltered, a trader said. Funds have less involvement in MGE wheat than CBOT wheat because the MGE has lower volume and open interest.

 

Fundamentals didn't support early gains in wheat, an analyst said. The markets should continue to take their cues from the flow of fund money, he said.