US Wheat Review on Wednesday: Lower on lack of news, spread trading

 

 

U.S. wheat futures ended lower Wednesday as traders bought corn and sold wheat amid a lack of fundamental news, analysts said.

 

Chicago Board of Trade September wheat ended down 4 1/4 cents to US$7.87 3/4 per bushel. Kansas City Board of Trade September wheat ended down 5 3/4 cents to US$8.19 1/4 and Minneapolis Grain Exchange September wheat ended down 3 cents to US$8.70 per bushel.

 

The wheat market has had little strong fundamental news recently, traders said. Spread trading was a dominant feature of Wednesday's market, as corn rose several cents, traders said.

 

"Sometimes, your spreads can trump whatever else is going on," said Jason Britt, a broker and analyst for Central State Commodities.

 

The strength in corn, which climbed in part on higher crude oil prices, supported wheat later in the day, traders added. But another trader said the connection between corn and wheat is "flimsy" and said there was little reason for wheat to be lower.

 

Wheat continues to be a follower of other markets right now, traders and analysts said, with a wide variety of factors potentially moving prices.

 

Analysts said the USDA's decision Tuesday not to release lands from the Conservation Reserve Program was supportive of wheat and other markets.

 

"The battle for acreage is going to heat up quite a bit more," Britt said.

 

Tuesday's Commodity Futures Trading Commission committee meeting on convergence in the wheat market produced little concrete news, but analysts said fears that the government would take action to bring futures and cash prices in line weighed on the market Wednesday. Futures are at a premium to cash.

 

Traders and analysts said an ongoing crop tour in North Dakota appears to have few surprises in store. Wheat in the western part of the state has suffered because of dry conditions, they said.

 

Crop scouts on one leg of the Wheat Quality Council's annual Hard Spring Wheat & Durum Tour on Wednesday canvassed fields that showed solid yield potential and little disease pressure.

 

Around 52 scouts fanned out Wednesday morning from Mandan, N.D., on several different routes through the state, with some participants also planning to survey fields in eastern Montana.

 

 

Kansas City Board of Trade

 

The KCBT wheat market was "very quiet" for most of the session, a trader said. There was little news moving the market, which was several cents lower throughout the day.

 

"Wheat was really choppy and range-bound all day, the trader said.

 

Losses were limited by corn, the trader said.

 

"We were a reluctant follower, but we followed," the trader said.

 

 

Minneapolis Grain Exchange

 

The MGE wheat market "continued to be dead," a trader said. He said rains in western Australia, a good European crop and slow export demand all pressured the market. The market trimmed losses as corn climbed, he said.

 

"That maybe kept the wheat kind of holding on here," the trader said.