Poultry
xClose

Loading ...
Swine
xClose

Loading ...
Dairy & Ruminant
xClose

Loading ...
Aquaculture
xClose

Loading ...
Feed
xClose

Loading ...
Animal Health
xClose

Loading ...
RSS
 
December 25, 2008

 

US Wheat Review on Wednesday: Sets December highs in thin pre-holiday trade

 

 

U.S. wheat futures set new December highs Wednesday in an abbreviated trading session, supported by strength in soybeans and a weaker dollar.

 

The Chicago Board of Trade March wheat added seven cents to close at US$5.82 1/4 per bushel. The contract traded in an 11 1/2-cent range, topping at US$5.85 on an anemic volume of 1,417 contracts.

 

Kansas City Board of Trade March wheat added six cents to US$6 a bushel, and Minneapolis Grain Exchange March wheat rose 7 1/4 cents to close at US$6.41 1/2.

 

Speculative funds bought an estimated CBOT wheat 1,000 contracts, according to late-morning estimates.

 

Thursday's trading session is canceled for the Christmas holiday. Electronic trading will resume at 7 p.m. EST Thursday.

 

"It's a thin market where just a little news or enthusiasm one way or other can magnify gains or losses," said Bill Nelson, a Doane Agricultural Services analyst.

 

"Technically [wheat's] been rallying nicely," Nelson said, noting the July contracts have broken their downtrend and are coming back into a range of being able to test November highs with the support of some acreage and weather concerns.

 

Potentially bearish forecasts added support, Nelson said.

 

"Soft red winter wheat in parts of southern Illinois and [production areas to the] east has been very wet over the last week with amounts generally from 400% to 600% of average," said Mike Tannura of T-Storm Weather.

 

"Significant snow melt occurs on Friday to further enhance wetness and heavy rain [1-2 inches] occurs on Friday night and Saturday," Tannura forecast. "Localized flooding of soft red winter wheat fields is sensible, though drier weather over the last 30 days prevents flood threats for the Delta."

 

 

Kansas City Board of Trade

 

Longer-range weather issues maybe shaping up in the hard red winter wheat growing areas, as well.

 

Some wheat production concerns may result if predictions of a strong La Nina weather pattern materialize, Doane's Nelson said.

 

Historical data suggest dryness in the central and southern Plains may result, which on top of predicted acreage cutbacks may add support to the wheat market, Nelson said.

 

 

Minneapolis Grain Exchange

 

Hard red spring wheat rallied in line with the other U.S. wheat markets Wednesday.

 

"Cash traders believe higher quality wheat will be in demand this spring," noted Benson Quinn Commodities analyst Kevin Kjorsvik. "Supplies from the Black Sea are reportedly of low quality making milling quality wheat extremely scarce."

 

But, the current price discrepancy between lower quality Black Sea wheat and hard wheat may force importers to accept the substandard wheat, Kjorsvik said. And, he added, "Canadians are sitting on a huge crop" and despite recent quality issues and downgrades, Australia is expected to market a formidable amount of wheat, as well.

 

Share this article on FacebookShare this article on TwitterPrint this articleForward this article
Previous
My eFeedLink last read