US Wheat Review on Wednesday: CBOT ends up 60-cent limit on spillover

 

 

Chicago Board of Trade wheat futures surged the daily, 60-cent limit Wednesday on spillover support from neighboring markets, while Kansas City Board of Trade and Minneapolis Grain Exchange wheat closed near limit up.

 

Nearby CBOT September wheat finished 60 cents higher at US$8.50 1/4 per bushel and was synthetically trading around US$8.54 to US$8.57, a trader said. CBOT December wheat ended 60 cents higher at US$8.75 1/4 and was synthetically trading around US$8.80 to US$8.85, he said.

 

KCBT September wheat climbed 59 1/4 cents at US$8.86 1/4 after temporarily trading 60 cents higher. MGE September wheat rose 54 3/4 cents to US$9.46 after trimming gains from limit up.

 

Wheat jumped on borrowed strength from rallies in CBOT corn and soybeans, which both ended up their daily, exchange-imposed limits. CBOT December corn soared 30 cents to US$5.58 1/2, and November soybeans bolted 70 cents higher to US$12.84.

 

Corn's inability to maintain losses Tuesday after the release of bearish U.S. Department of Agriculture crop data was a trigger for Wednesday's rally in the markets, said Dave Marshall, an independent marketing advisor and commodities broker. There are ideas the markets have seen short-term lows after corn Tuesday rebounded from early weakness.

 

The markets were all "feeding on each other" as they rallied Wednesday, a CBOT floor trader said. A rally in crude oil added to the bullish tonnee.

 

Most of the activity in CBOT wheat was in December contract, a floor trader said. Commodity funds bought an estimated 5,000 contracts.

 

Wheat will continue to feel spillover support from future rallies in the row crops, as "a rising tide lifts all boats," a trader said. The wheat market is underpinned by strong world export demand, although global wheat production is expected to set a record this year, he said.

 

The USDA's weekly export-sales report, due out at 8:30 a.m. EDT Thursday, should help give the market direction, a trader said. U.S. wheat export sales for the week ended Aug. 7 are expected to be 400,000 to 750,000 tonnes.

 

 

Kansas City Board of Trade

 

KCBT wheat futures followed CBOT corn and soybeans into positive territory, a trader said. Technical buying helped propel the market higher, he said.

 

KCBT September wheat temporarily traded limit up but trimmed gains ahead of the close. KCBT December wheat ended up the 60-limit at US$9.09 1/4.

 

The daily limit for CBOT and KCBT wheat Thursday will be expanded to 90 cents, while the limit will remain 60 cents at the MGE. Deferred KCBT contracts ended limit up, prompting the limit to widen at the exchange.

 

 

Minneapolis Grain Exchange

 

MGE September wheat temporarily traded limit up, along with CBOT and KCBT wheat, but pared gains before the close. MGE December wheat closed up 55 1/4 cents at US$9.47.

 

The slow spring wheat harvest should pick up speed in the coming days, especially late this weekend, as a warmer drier pattern develops in the U.S. northern Plains, according to a forecast from T-Storm Weather. Wetness in the Dakotas lately has slowed cutting.

 

The crop was 16% cut as of Sunday, down from the average of 36%, according to USDA. Concerns about harvest delays have recently been seen as supportive to the market.