July 30, 2008

 

US Wheat Review on Tuesday: Mostly lower; lack of news, corn supports

 

 

U.S. wheat futures ended mostly lower Tuesday on a lack of fresh fundamental news, but spillover strength from corn limited losses, analysts said.

 

Chicago Board of Trade September wheat was down 5 3/4 cents to US$7.92 per bushel, and Minneapolis Grain Exchange September wheat was down 3 1/4 cents to US$8.73. Kansas City Board of Trade September wheat was up 1/2 cent to US$8.25.

 

Prices were lower throughout the day as the market found little news to spark a rally, analysts said. Liquidation in a variety of markets, including crude oil, pressured wheat.

 

"I think today there is just a lack of fundamental issues in the market at this point," said Shawn McCambridge, senior grains analyst with Prudential-Bache.

 

Wheat trimmed its losses later in the day as the market followed corn, which rallied to close 12 cents higher.

 

"As corn is a feed grain and wheat is pretty much is priced as a feed grain right now, the two are pretty much tied at the hip in terms of pricing," said Dave Marshall, an independent commodity broker and analyst in Nashville, Ill.

 

Analysts added that although several counties have been purchasing wheat in recent days, none of them have turned to countries other than the U.S., which was bearish for the market here.

 

"I guess it's great to be Ukrainian, Russian or Kazakhstan," Marshall said.

 

Analysts say a wheat tour in North Dakota this week could move the market, depending on what news emerges. On Tuesday, crop scouts on one leg of the Hard Spring & Durum Wheat Tour confirmed that dry weather has cut yield potential in western North Dakota, with one participant saying conditions were worse than expected.

 

A trader said the news wasn't a surprise, and the market has been anticipating that parts of the crop in western North Dakota is troubled.

 

Analysts said the market was anticipating news from a Commodity Futures Trading Commission meeting Tuesday, but traders said that nothing emerged to move the market.

 

 

Kansas City Board of Trade

 

KCBT wheat futures were firmer on the day because "most of the shorts on the wheat-corn spread were in Chicago," a trader said.

 

Prices had been lower for much of the day but "rallied because corn rallied," the trader said.

 

"There's no other fundamental factor going on that I see," he said.

 

 

Minneapolis Grain Exchange

 

Minneapolis Grain Exchange wheat followed CBOT wheat lower, a trader said. He said there was light trading and a "limited pit population" Tuesday.

 

A trader said there was conflicting news for the market following Monday's U.S. Department of Agriculture crop-progress report, which showed the portion of spring wheat crop rated good to excellent at 60%, down from 63% last week.

 

"The crop conditions going down fairly dramatically on the USDA report, that would have had us [up] all day, except for the two-and-a-half inches of rain in North Dakota, which pretty much canceled that out," a trader said.

 

Video >

Follow Us

FacebookTwitterLinkedIn