US Wheat Review on Tuesday: Falls on profit-taking, setback

 

 

Profit-taking pulled U.S. wheat futures lower Tuesday as the market retreated from strong gains Monday.

 

Chicago Board of Trade March wheat finished down 9 3/4 cent at US$5.41 a bushel. Kansas City Board of Trade March wheat lost 8 cents to US$5.38, and Minneapolis Grain Exchange March wheat slid 7 3/4 cents to US$5.49.

 

Traders took money off the table amid sentiment that Monday's rally was overdone, analysts said. Wheat climbed to three-week highs Monday on short-covering, technical buying and unwinding of long corn/short wheat spreads, they said. Tuesday, commodity funds sold an estimated 2,000 contracts.

 

"You don't have the funds buying, and you don't have the short covering," a broker said.

 

The markets continued to trade in thin-volume "holiday mode," with activity expected to remain choppy through the end of the year. The CBOT, KCBT and MGE trade abbreviated days Thursday and are closed Friday.

 

 

Kansas City Board of Trade

 

KCBT wheat pulled back from Monday's surge higher in thin trading. Low volume tends to exaggerate moves in the market, a trader said.

 

The U.S. hard red winter wheat crop has a blanket of snow over it in many parts of the Plains, which protects it from cold weather, traders said. The key growing period for the crop will be in the spring.

 

 

Minneapolis Grain Exchange

 

MGE wheat finished lower with the other markets.

 

There was a lack of fresh fundamental news for wheat. The supply and demand storyline remains bearish, with world supplies considered large and export demand seen as weak.