December 12, 2009

 

US Wheat Review on Friday: Ends near unchanged, watching CBOT corn

 

 

U.S. wheat futures finished near unchanged Friday as strength in the neighboring corn market helped underpin prices.

 

Chicago Board of Trade March wheat ended up 1/2 cent at US$5.37 1/2 a bushel, down 20 1/2 cents on the week. Kansas City Board of Trade March wheat edged 1/2 cent higher to US$5.27 1/2, and Minneapolis Grain Exchange March wheat slipped 3/4 cent to US$5.42 1/2.

 

CBOT corn has been a leader of wheat for the past few days and was "keeping wheat from falling apart," a CBOT floor trader said. The grains are linked because funds often trade in a basket of commodities and because both are used for animal feed.

 

Corn climbed on technical and fund buying and worries about the delayed U.S. harvest. March corn finished up 11 1/2 cents at US$4.04 1/2.

 

Supply and demand factors remain weak for wheat, with world supplies considered large and export demand lagging, said Dave Marshall, an independent marketing adviser and commodities broker. Wheat has been ignoring its own fundamentals in favor of outside influences, he said.

 

The U.S. Department of Agriculture on Thursday increased its estimate for world ending stocks to 190.9 million tonnes, from its November estimate of 188.3 million. Those are the largest global stocks since 2001-02.

 

"To really boost the wheat market, you need to see some fundamental news event occur that raises the prospect of stocks getting smaller," Marshall said. "Since the harvest time, we've continually added to the wheat supply, and we need to change that."

 

Commodity funds bought an estimated 2,000 wheat contracts at the CBOT.

 

 

KCBT March wheat ended down 21 1/2 cents on the week.

 

The markets crawled higher Friday, despite gains in the U.S. dollar. A firm dollar is often seen as bearish because it makes U.S. wheat less attractive to foreign buyers. That may have helped keep a lid on wheat Friday, a broker said.

 

 

MGE March wheat finished down 20 1/2 cents on the week. The market slipped slightly in a slow, choppy session, a trader said.