June 27, 2009


US Wheat Review on Friday: CBOT ends higher as Kansas City Board of Trade, Minneapolis Grain Exchange stumble



U.S. wheat futures closed mostly lower Friday after trading both sides in choppy activity, with all three markets finishing lower on the week.


Chicago Board of Trade September wheat settled up 1 1/2 cents at US$5.63 a bushel. Kansas City Board of Trade September wheat slipped 2 1/2 cents to US$6.00, and Minneapolis Grain Exchange September wheat fell 5 3/4 cents to US$6.67 1/4.


CBOT wheat traded in a narrow range and managed to end slightly higher, despite the losses at the KCBT and MGE. CBOT September wheat hit an open outcry session high of US$5.65 and low of US$5.59.


Commodity funds bought an estimated 2,000 contacts at the CBOT.


Weakness in the U.S. dollar was seen as supportive for the grains, although export demand for U.S. wheat has been lackluster, a trader said. Wheat also recently has shown it is able to trade independently of the dollar's influence, he said.


Traders are waiting for the U.S. Department of Agriculture to issue acreage and quarterly stocks data at 8:30 a.m. EDT Tuesday. Some positioning is expected Monday in front of the reports, although their release is a bigger event for corn and soys than for wheat, traders said.


Tuesday also is first notice day for July futures contracts. There are ideas deliveries will be heavy on the first or second day, a market analyst said.


July options expired quietly Friday.



Kansas City Board of Trade


KCBT September wheat ended down 25 1/4 cents on the week.


Warm, dry weather in the U.S. Plains is expected to advance winter wheat harvest during the weekend, traders said. Cutting in Kansas, the country's top hard red winter wheat-growing state, continues to advance throughout the state, but many farmers have been battling pop-up thunderstorms and muddy fields, according to growers' group Kansas Wheat.



Minneapolis Grain Exchange


MGE wheat led the downside as inter-market spreads corrected, a trader said. MGE also led the downside Thursday.


MGE July wheat on Friday ended down 11 1/4 cents at US$6.67 1/4 and closed down 31 3/4 cents on the week. September wheat closed down 28 1/2 cents on the week.


Weather for hard red spring wheat in the northern U.S. Plains is seen as generally "favorable," although there is the potential for some heavy rains, a trader said. Recent rain and warmer temperatures in the Canadian Prairie have improved conditions for developing crops, according to private weather firm DTN Meteorlogix.