US Wheat Review on Wednesday: Closes mostly up on corn, outside markets

 

 

U.S. wheat futures closed mostly firmer Wednesday as the markets shook off crop reports that confirmed expanding world supplies and followed corn higher, traders said.

 

Chicago Board of Trade September wheat settled 5 cents higher at US$4.90 1/4 per bushel. Kansas City Board of Trade September wheat edged up 2 cents to US$5.19, and Minneapolis Grain Exchange September wheat fell 5 3/4 cents to US$5.63.

 

Short-covering helped boost prices as speculative funds hold a large net short position in CBOT wheat, traders said. Bullish signals from outside markets added support, they said.

 

CBOT wheat rebounded after the nearby September contract in open outcry trading set a fresh contract low of US$4.77, below its previous low of US$4.85, set Tuesday. The markets came under pressure in early activity after the U.S. Department of Agriculture estimated U.S. and world production and ending stocks had expanded since July.

 

The USDA's crop data did not change wheat's storyline, as traders had expected to see increases, so the markets kept an eye on CBOT corn for direction, an analyst said. Corn rebounded to close higher after sliding in early dealings.

 

Wheat prices will continue to "be heavily influenced by any sharp increases or decreases in the corn futures," an analyst said.

 

 

Kansas City Board of Trade

 

KCBT wheat rose on firm CBOT corn and on supportive outside markets, traders said. Before the bounce, KCBT September wheat in open outcry trading set a fresh contract low of US$5.08 1/2, below its previous low of US$5.17, set Tuesday.

 

Wheat felt support from the weaker U.S. dollar and from higher crude oil and equities, traders said. A weak dollar is seen as friendly because it makes U.S. wheat more attractive to foreign buyers.

 

Traders are waiting to see the USDA's weekly export sales data, due out at 8:30 a.m. EDT Thursday. U.S. wheat export sales for the week ended Aug. 6 are expected to be 300,000 tonnes to 500,000 tonnes.

 

 

Minneapolis Grain Exchange

 

MGE wheat led the downside during the session and finished lower after the USDA raised its estimates for spring wheat production and carryout above expectations, traders said. The increased crop estimate reflected "sharply higher expected yields" in the northern Plains, the government said.

 

The USDA projected the U.S. spring wheat crop at 548 million bushels, up from its July estimate of 506 million. That was above the average trade estimate of 523 million and the highest pre-report estimate, which ranged from 490 million to 543 million.

 

The USDA increased hard spring wheat carryout to 191 million bushels from its July estimate of 165 million.