May 22, 2009


US Wheat Review on Thursday: CBOT, Kansas City Board of Trade slip as Minneapolis Grain Exchange edges higher



U.S. wheat futures settled mostly lower Thursday after a choppy trading session, with Chicago Board of Trade wheat leading the downside in a modest setback.


Chicago Board of Trade July wheat closed down 4 1/4 cents at US$5.93 1/2 a bushel. Kansas City Board of Trade July wheat lost 3 cents to US$6.47, and Minneapolis Grain Exchange July wheat edged up 1 cent to US$7.26 1/2.


CBOT soft red winter wheat pulled back slightly after recent gains amid ideas the market was due for a correction, an analyst said. The July contract on Wednesday hit a nearly four-month high before paring gains.


Commodity funds sold an estimated 3,000 wheat contracts at the CBOT on Thursday.


Wheat was watching other markets for direction during the session but received mixed signals, a trader said. Losses in equities and crude oil were bearish influences on the markets, while a weak U.S. dollar was seen as supportive, a trader said. Neighboring CBOT soybeans ended firmer, while corn ended lower.


"It seems like all week wheat has been kind of following the other markets," a trader said. "We're not really trading on our own much."


Weekly U.S. wheat export sales of 563,500 tonnes were above expectations, which ranged from 200,000 tonnes to 450,000 tonnes. Wheat was "due for a good week" of export business after sluggish demand recently and could continue to see stronger demand due to the drop in the U.S. dollar, said Mike Zuzolo, analyst for Risk Management Commodities.



Kansas City Board of Trade


KCBT hard red winter wheat settled lower on profit-taking and pressure from weak outside markets, a trader said. Losses in crude oil and equities set a bearish tonnee, he said.


Harvest pressure does not seem to be a factor in the markets yet, but it should become more of an influence by the end of the month, Zuzolo said. Cutting has started in parts of Texas and Louisiana, according to government reports.


"We're not really in the deep part of harvest yet," he said.



Minneapolis Grain Exchange


MGE hard red spring wheat futures finished slightly higher after recovering from earlier losses. The cash market for spring wheat remains weak, a trader said.


There are lingering concerns about slow planting and emergence in North Dakota, the top spring wheat-growing state, due to cool, wet weather earlier in the season, a trader said. Weather has been drier this week, but temperatures remained cool, according to Cropcast Agricultural Weather.


The CBOT, KCBT and MGE will be closed Monday in observance of Memorial Day.