US Wheat Review on Thursday: Finishes lower for third straight day

 

 

U.S. wheat futures dove for the third straight day Thursday and closed at a nearly one-week low on commodity fund selling and weak fundamentals.

 

Chicago Board of Trade March wheat finished down 4 1/2 cents at US$5.71 1/2 a bushel. Kansas City Board of Trade March wheat lost 3 1/2 cents to US$5.62, and Minneapolis Grain Exchange March wheat slumped 3 cents to US$5.77 1/4.

 

Commodity funds sold an estimated 2,000 contracts at the CBOT. The absence of fund support opened the door for losses, as fundamentals are seen as bearish, an analyst said. CBOT March wheat finished at its lowest price since Nov. 27.

 

Egypt's state-owned General Authority for Supply Commodities bought 240,000 tonnes of Russian and German wheat in a tender Thursday and none from the U.S. The snub wasn't surprising, as U.S. wheat is considered too expensive to be competitive on the world market, traders said.

 

Weekly U.S. wheat export sales of 390,700 tonnes were within trade expectations of 300,000 tonnes to 500,000 tonnes and nothing to get excited about, they said. The U.S. faces competition for business from other exporters because there is a lot of wheat to go around in the world.

 

Trading at the CBOT was choppy amid low volume, traders said. The March contract closed above its 20-day moving average at US$5.66.

 

 

Kansas City Board of Trade

 

KCBT wheat slumped as the markets continued to pull back from high prices, a trader said. Wheat is overpriced for its fundamentals following recent rallies that were supported by fund and technical buying, he said.

 

Wheat closed lower with corn, which also had unimpressive export sales, an analyst said. Wheat and corn are linked because both can be used for animal feed. Funds also often trade in a basket of commodities.

 

 

Minneapolis Grain Exchange

 

It was "not friendly" to MGE wheat that Statistics Canada raised its all-wheat production estimate above trade expectations, a trader said. Canada is a major wheat producers and exporter and competes with the U.S. for business.

 

Statistics Canada pegged production at 26.515 million tonnes, up from its September estimate of 24.58 million and above trade estimates of 24.9 to 25.5 million. The increase reinforced bears' ideas that world supplies are large and export demand will be tough to come by, a CBOT trader said.