US Wheat Review on Tuesday: Ends near unchanged after early weakness
U.S. wheat futures shook off early losses Tuesday to close near unchanged as the markets rebounded a bit on technical buying.
CBOT September wheat rose 1/2 cent to US$8.36 1/2 per bushel. Kansas City Board of Trade September wheat jumped 1 1/4 cents to US$8.61 1/4, and Minneapolis Grain Exchange September wheat edged up 1/4 cent to US$8.85.
The markets were in an oversold condition and due for a bounce after a steep slide Monday, an analyst said. Despite ending nearly flat, wheat continued to be a follower of corn, which saw double-digit losses for the second consecutive day, said Dave Marshall, an independent marketing advisor and commodities broker.
Wheat "didn't have to go down today, even though corn continued to lose some of its luster from recent gains," because wheat was nearly 60 cents lower Monday while corn was 30 cents lower, Marshall said.
The daily exchange-imposed limits are 60 cents for wheat and 30 cents for corn. The grains are linked because both are used for animal feed.
"Wheat and corn continue to trade together," Marshall said.
There was some market chatter about global demand, including a purchase by Jordan. Egypt's state-owned General Authority for Supply Commodities said after the close it was tendering to buy at least 55,000 to 60,000 metric tonnes for shipment Aug. 5-15 on a free-on-board basis.
Before the tender was announced Monday, Citigroup analyst Terry Reilly said he expected Egypt would be back in the market to cover its needs. The results of GASC's tender should help give the markets direction Wednesday, although U.S. wheat remains at a competitive disadvantage to the Black Sea region, traders said.
Kansas City Board of Trade
KCBT wheat futures ended mixed, with September contract ending firmer and most deferred months ending with modest losses. Technical buying boosted September, while other contracts stumbled under pressure from weak CBOT corn and crude oil, a KCBT floor trader said.
Pressure from the advancing winter wheat harvest continued to hang over the market, traders said. Kansas' harvest was 79% complete as of Sunday, below the average of 89%, according to the U.S. Department of Agriculture.
Minneapolis Grain Exchange
MGE September wheat ended slightly higher in a rebound from Monday's losses. The market watched as CBOT wheat moved into positive territory and as CBOT corn trimmed losses, a trader said.
The USDA lowered its good-to-excellent rating for spring wheat by five percentage points to 69%. Traders had expected the rating to stay steady or increase by as much as two percentage points.