April 7, 2006
US Wheat Review on Thursday: Higher, led by kansas city board of trade on human rights watch crop worries
U.S. wheat futures ended higher Thursday, led by gains in Kansas City Board of Trade futures on speculative buying and worries about additional U.S. hard red winter wheat crop losses amid dry, windy conditions and above-normal temperatures, brokers said.
Minneapolis Grain Exchange spring wheat futures found lingering support from last Friday's U.S. Department of Agriculture estimate of a 1% drop in 2006 U.S. spring wheat acres and from concerns about U.S. planting delays amid Red River Valley flood worries.
Gains in outside commodity markets Thursday including gold and crude oil and a weak dollar were also supportive, brokers said.
Chicago Board of Trade May wheat ended up 5 1/2 cents at US$3.52 1/2. July wheat ended up 6 cents at US$3.66 per bushel.
Speculative funds were net buyers of about 3,600 lots by 1330 EDT, brokers said. ABN Amro bought 1,000 July and sold 100 May; Fimat bought 500 May; Iowa sold 500 July; and JP Morgan bought 300 May and sold 800 July.
CBOT wheat spread trade was active, with 9,000 May/July done before 1330 EDT ahead of first notice day on April 28, brokers said.
Rosenthal Collins spread 2,500 May/July, Tenco Inc. spread 2,000 May/July, ADM spread 1,500 May/July, UBS spread 1,000 May/July, and O'Connor and Co. spread 1,000 July/May, they noted.
Midday spot U.S. HRW Gulf barge bids rose 1 cent and SRW Gulf barge bids were unchanged Thursday, cash sources said.
Weekly U.S. wheat export sales, at 274,600 metric tonnes (old and new-crops combined) were near the low-end of traders' expectations (200,000 to 450,000 tonnes), CBOT brokers noted.
Net weekly U.S. old-crop wheat export sales of 271,300 metric tonnes were 47% below the previous week and 32% under the prior four-week average, the U.S. Department of Agriculture said.
In global wheat news, the European Union grain management committee Thursday granted 91,000 metric tonnes of subsidized free-market at a maximum refund of EUR4.00 a tonne in its weekly tender Thursday, according to E.U. figures.
The European Union also granted licenses Thursday to export 145,916 metric tonnes of wheat and 31,351 tonnes of barley from intervention stores.
U.S. wheat traders expected light positioning Friday ahead of Monday's USDA monthly report.
Analysts surveyed thought the USDA would slightly lower its 2005-06 (old-crop) U.S. wheat ending stocks estimate by 8 million bushels from its last estimate of 542 million bushels.
However, the old-crop ending stocks data were not expected to heavily impact the U.S. wheat futures markets as U.S. weather forecasts, new-crop U.S. wheat production prospects, and the actions of speculative funds remain the focal point, analysts said.
Kansas City Board of Trade
KCBT May ended up 9 cents at US$4.31 per bushel while KCBT July closed up 8 1/4 cents at US$4.36.
Man Financial bought 300 KCBT May and 300 July, Prudential traded 100 July and bought 100 December, and UBS bought 100 July and traded 100 December by midday.
The popular KCBT July hard red winter/CBOT soft red winter wheat spread closed at a new high Thursday of 70 cents, premium KCBT. The previous high close of 67 3/4 cents, premium KCBT, was set on Wednesday.
Cash Kansas City hard red winter wheat trade was relatively quiet Thursday, with a steady tonnee, sources said.
Minneapolis Grain Exchange
MGE May settled Thursday up 5 1/4 cents at US$4.16 3/4 per bushel and July wheat ended up 5 1/2 cents at US$4.22 1/2 per bushel.
Worries about U.S. spring wheat planting delays and possible additional acreage loss due too much moisture in the key Red River Valley region underpinned futures, brokers said.
Those fears build on last Friday's bullish USDA planting-intentions data that indicated U.S. farmers intended to reduce other spring wheat plantings this year by 1%, or 137,000 acres, from last year.
The spread between new-crop MGE September hard red spring wheat and CBOT September soft red winter wheat closed at 48 3/4 cents, premium MGE, on Thursday after setting a new high of 49 3/4 on Wednesday.
Cash U.S. spring wheat basis bids were steady to 20 cents lower Thursday, cash sources said.
Minneapolis wheat receipts totaled 112 railcars Thursday versus last year's 153 railcars. There were 18 durum receipts versus last year's 153 cars.