April 29, 2006

 

US Wheat Review on Friday: Mostly up on specs, kansas weather

 

 

U.S. wheat ended mostly higher Friday on speculative buying and midday weather forecasts for less rain in western Kansas's hard red winter wheat belt into the weekend than had been expected early Friday, brokers said.

 

Kansas is the top U.S. winter wheat-producing state; and its hard red winter wheat crop is especially critical this year as crops in key producers Oklahoma and Texas are in dire straits due to drought.

 

Friday's gains followed opening weakness due to early Southern Plains rain forecasts, wherein new-crop Kansas City Board of Trade July wheat fell to a 3 1/2-week low of US$4.26 per bushel.

 

Rallying precious metal, soy and corn markets were also supportive Friday, along with a weak dollar, brokers said.

 

The three U.S. May wheat futures contracts found support from no deliveries against KCBT and MGE May on Friday's first notice day.

 

Chicago Board of Trade July wheat ended up 2 3/4 cents at US$3.58 1/2 while May closed up 3 3/4 cents at US$3.46 1/4 per bushel.

 

Speculative funds bought 1,000 contracts by 1:30 p.m. EDT, brokers said. Fimat bought a net 1,800 July, Rand Financial bought 500 July, Deutsche Bank bought 400 December, R.J. O'Brien traded 1,000 July and Iowa Grain sold 1,000 July, brokers said.

 

CBOT wheat spread trade was relatively quiet.

 

First notice day deliveries Friday against CBOT May wheat futures, at 1,357 lots, met expectations. Stoppers included a customer of Bear Stearns at 424 lots and a customer of Calyon Financial at 300 lots.

 

Midday spot U.S. HRW Gulf barge bids rose 2 cents Friday while spot SRW bids fell 2 cents, cash sources said.

 

U.S. wheat export news was quiet.

 

In global wheat news, India is considering a cut in wheat import duties for direct users, such as flour mills and biscuit manufacturers, India's Food Minister, Sharad Pawar, said Friday.

 

India recently received its first cargo of wheat imports in six years as it faces short supplies.

 

The U.S. Department of Agriculture's attache in India this week forecast India would import about 4 million tonnes of wheat during 2006 due to the shortages.

 

The Canadian Wheat Board raised prices of wheat sold in the 2006-07 crop year by CUS$1.00 per metric tonne on most classes, citing volatile currency and commodity markets.

 

 

Kansas City Board of Trade

 

KCBT July hard red winter wheat settled down 1/4 cent at US$4.31 1/2 while May ended up 7 1/2 cents at US$4.29 3/4 per bushel.

 

Spot cash 11% through 14% U.S. hard red wheat basis bids were unchanged Friday, according to the KCBT.

 

Traders noted weather forecasts and reports from the annual Wheat Quality Council tour of Kansas will influence trade next week.

 

About 54 crop scouts will drive six different routes through Kansas and northern Oklahoma next week to measure the wheat plants, observe growing conditions and plant health and calculate yields.

 

The tour ends Thursday afternoon in Kansas City with final Kansas 2006 HRW wheat crop yield estimates.

 

The U.S. Department of Agriculture said Monday that 34% of the U.S. winter wheat crop was in very poor to poor shape, and tour leaders said they expected to find drought stress and freeze damage.

 

Thirty percent of the Kansas' winter wheat crop was in good-to-excellent shape as of Sunday, compared with 38% last week; 31% of the state's crop was in very poor-to-poor shape versus last week's 23%, the USDA said.

 

 

Minneapolis Grain Exchange

 

MGE July wheat settled up 3 1/4 cents at US$4.20 1/4 while May wheat ended up 10 cents at US$4.17 per bushel.

 

Cash spring wheat basis bids were steady Friday, cash sources said. Friday's Minneapolis wheat receipts totaled 43 railcars versus last year's 193 railcars. There were 23 durum receipts versus 24 cars last year.