March 20, 2010

 

US Wheat Review on Friday: Down on dollar; pulls back from previous gains

 

 

Strength in the U.S. dollar and bearishness about large supplies dragged U.S. wheat futures lower Friday, erasing advances made earlier in the week at the Chicago Board of Trade.

 

Nearby CBOT May wheat settled down 5 1/2 cents, or 1.1%, at US$4.83 3/4 a bushel. The contract ended down 1 1/2 cents on the week.

 

Kansas City Board of Trade May wheat ended 3 cents lower, or 0.6%, at US$4.92. Minneapolis Grain Exchange May wheat finished down 5 1/4 cents, or 1%, at US$5.09 1/4.

 

The dollar rose on worries about Greece's debt and weighed on the grains for the second consecutive day. A firm dollar is often considered bearish for the grains because it makes U.S. commodities less attractive to foreign buyers. Wheat slipped with neighboring CBOT corn, crude oil and precious metals.

 

Wheat gave back gains from earlier in the week amid a lack of fresh news. The fundamental storyline for the markets remains unfriendly because world supplies are comfortable and there is stiff competition for export business.

 

Commodity funds sold an estimated 2,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT May wheat finished up 2 3/4 cents on the week.

 

The firmer dollar, weaker crude oil and slipping corn prices created a negative tone Friday, a trader said. In other news, private analytical firm Informa Economics raised its estimate for 2010 winter wheat acres, but the increase did not have a major impact on trading because participants already know there is a lot of wheat around, he said.

 

The firm raised its estimate for winter wheat acres to 37.597 million from its January estimate of 37.1 million, traders said. The USDA in January put winter wheat acres at 37.1, down from 2009 seedings of 43.3 million.

 

 

Minneapolis Grain Exchange

 

MGE May wheat ended up 4 1/4 cents on the week.

 

There continue to be worries that wetness in the northern U.S. Plains may delay spring wheat planting, which typically begins in April. The Red River valley in the eastern Dakotas and western Minnesota is expected to flood this weekend due to melting snow.

 

Informa pegged acres of spring wheat other than durum at 13.733 million, compared to USDA's estimate for 2009 plantings of 13.3 million, traders said. The U.S. Department of Agriculture is due to issue its prospective plantings estimates March 31.