US Wheat Review on Wednesday: Retreats on broad based commodity weakness

 

 

US wheat futures ended lower, following the lead of neighboring commodities amid the absence of supportive demand to underpin prices.

 

March CBOT wheat ended 4 1/2 cents lower at US$5.35 1/4, March KCBT wheat settled 5 cents lower at US$5.28, and March MGE wheat finished 1 3/4 cents lower at US$5.46 1/2.

 

In CBOT trades, speculative fund selling was estimated at 3,000 lots.

 

The wheat market remains a follower of price movement in corn, crude oil and metals, as it's not performing in the export market despite being in a demand phase, said Joe Victor, analyst with Allendale Inc.

 

Without outside support, the market has nothing to entice buyers into pushing prices, as futures remain anchored by the weight of large domestic and world supplies.

 

The wheat market presents itself as a commodity that has a lot of supply but not the offsetting demand, opening the door for profit taking to surface in the absence of any outside strength, Victor said.

 

The market lacks any fundamental reason to rally as it did, so any corrective setback is not a surprise, he added.

 

On tap for Thursday, U.S. Department of Agriculture is slated to issue updated supply-and-demand estimates in a monthly report at 8:30 a.m. EST. The average of analysts' estimates for U.S. wheat carryout is 886 million bushels, up 1 million bushels from its November estimate, according to a Dow Jones Newswires survey of 14 analysts.

 

USDA will also release its weekly export sales report at 8:30 a.m. EST Thursday. Analysts surveyed by Dow Jones Newswires estimate wheat sales for the week ended Dec. 3 to be in the range of 300,000 to 500,000 metric tonnes.

 

 

Kansa City Board of Trade

 

KCBT wheat futures settled lower in light volume trade. There was a lack of interest in the market, with traders taking a wait and see approach ahead of Thursday's USDA supply and demand report, a KCBT floor analyst said. Prices eroded, with technical pressure carrying over after prior sessions when active contracts dropped below major moving average support levels, he added.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended lower in step with the rest of the U.S. wheat complex. The market received some mild hedge pressure, but producers are disengaging from the market at current price levels, a MGE trader said. The unwinding of some intermarket spreads was featured as well, as the market lacks the speculative interest that emerges on upward moves, a trader added.