US Wheat Review on Friday: Stumbles on comfortable world supplies

 

 

U.S. wheat futures stumbled Friday on bearishness about comfortable supplies.

 

Chicago Board of Trade September wheat slid 3 1/2 cents to US$5.18 3/4 a bushel, down 10 1/4 cents on the week. Kansas City Board of Trade September wheat lost 4 cents to US$5.47 1/2, and Minneapolis Grain Exchange September wheat slipped 4 3/4 cents to US$6.02 3/4.

 

The U.S. Department of Agriculture, in its July supply/demand report, shaved 2009-10 world carryout to 181.3 million tonnes from its June estimate of 182.7 million. Despite the drop, stocks are still the largest since 2001-02 and considered "ample," said Dave Marshall, an independent commodity broker and marketing adviser.

 

"There's not any real concern about us running out of wheat," he said.

 

U.S. soft red winter wheat ending stocks of 170 million bushels are "burdensome," Marshall said. There continue to be concerns about the quality of the crop after a rainy growing season. SRW wheat, traded at the CBOT, is used to make pastries and snack foods.

 

There continues to be some late harvest pressure on the market as winter wheat cutting moves north, an analyst said. Wheat will likely become more of a follower of CBOT corn and soys now that harvest is wrapping up, he said.

 

CBOT September wheat hit an open outcry session low of US$5.15, above its weekly low of US$5.12, before paring losses a bit. The market's ability to sustain the weekly low technically "looks fairly decent on a Friday," a broker said.

 

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

 

 

Kansas City Board Of Trade

 

It was seen as neutral to slightly bearish that the USDA increased its estimates for U.S. 2009-10 carryout and for U.S. production, as expected, traders said. The markets' "rather muted" response to the data indicated that most of the numbers had already been dialed in, an analyst said.

 

Still, confirmation of comfortable supply levels weighed on prices, a trader said. Strength in the U.S. dollar was a bearish influence, he said.

 

 

Minneapolis Grain Exchange

 

The USDA's estimate for production of U.S. spring wheat other than durum came in at 506 million bushels, on target with the prereport estimate. However, a decline in the estimate for Canada's wheat crop to 23.5 million tonnes from 25 million last month was seen as somewhat supportive, an analyst said.

 

Extended dry, cool conditions in western growing areas delayed germination and crop establishment, reducing both area and yield prospects, according to the USDA. Wheat in the south-central Canadian Prairies should benefit from a wetter trend in the 15-30-day outlook, said Cropcast Agricultural Weather.