US Wheat Review on Thursday: Finishes lower on firm dollar, pullback

 

 

U.S. wheat futures settled with double-digit losses Thursday amid pressure from the strong dollar and weak export demand.

 

Chicago Board of Trade March wheat fell 18 3/4 cents to US$5.18 1/2 a bushel. Kansas City Board of Trade March wheat dropped 15 1/2 cents to US$5.15, and Minneapolis Grain Exchange, or MGEX, March wheat sank 15 cents to US$5.29 1/4.

 

The rising U.S. dollar and widespread losses in commodities encouraged sell-offs in the grains, traders said. A firm dollar reduces traders' appetite for risk and makes U.S. commodities less attractive to foreign buyers, he said.

 

Commodity funds sold an estimated 4,000 wheat contracts at CBOT. They were also heavy sellers in neighboring CBOT corn and the soy complex.

 

Wheat's supply and demand story line is unsupportive because the world has plenty of the golden grain to go around, an analyst said. Large global supplies mean there is stiff competition for export business, and demand for U.S. wheat remains unimpressive, he said.

 

Weekly U.S. wheat export sales of 345,000 tonnes were within trade expectations but nothing to get excited about, a trader said. Total export commitments as of Dec. 10 were 66% of the U.S. Department of Agriculture's target for the year, down from 81% last year and the average of 78%. The USDA projects exports of 875 million bushels.

 

 

Kansas City Board of Trade

 

The strong dollar and spillover pressure from steep losses in other markets like corn and soy kept KCBT wheat on the defensive, traders said. The market is missing strong demand to underpin prices, they said.

 

The USDA last week pegged U.S. wheat carryout at a 10-year high of 900 million bushels. "That is a mountain of wheat," an analyst said.

 

 

Minneapolis Grain Exchange

 

Prices pulled back after late buying Wednesday helped the markets finish in positive territory. MGEX wheat led the upside Wednesday and finished 7 cents higher, despite a lack of fresh news.

 

"The bounce yesterday was the unexpected part," a Minneapolis broker said. "This is taking it back again."