US Wheat Review on Thursday: Closes near unchanged, trims gains

 

 

U.S. wheat futures closed near unchanged Thursday after trimming gains from a short-covering rally.

 

Chicago Board of Trade December wheat rose 1/2 cent to US$7.26 1/4 per bushel. Kansas City Board of Trade December wheat closed up 1/4 cent at US$7.64 1/4, and Minneapolis Grain Exchange December wheat edged up 1 cent to US$7.91.

 

Wheat jumped in thin trading during the day session on short-covering after recent sell-offs and ahead of U.S. Department of Agriculture crop reports, to be released at 8:30 a.m. EDT Friday, traders said. The markets were due for a bounce after CBOT December wheat hit a fresh 9 1/2-month low of US$7.14 in early dealings, they said.

 

All in all, it looked like a "typical pre-report trade," said Greg Wagner, analyst for AgResource Company. The session high for CBOT December wheat was US$7.34.

 

Analysts expect the USDA to trim its estimate for U.S. 2008-09 wheat ending stocks and to raise its forecast for world wheat production. The average of analysts' estimates for U.S. wheat stocks is 553 million bushels, down from the USDA's August estimate of 574 million, according to a Dow Jones Newswires survey of 14 analysts.

 

But wheat will not be the main focus of the reports. The CBOT grain floor will pay more attention to data on U.S. corn and soybean production amid uncertainty about the size of the crops.

 

The trend for wheat remains to the downside after recent losses, an analyst said. Bears have the technical advantage, he said.

 

 

Kansas City Board of Trade

 

KCBT wheat closed near unchanged in a lackluster trade, as market participants waited for the USDA data, an analyst said. The market will likely take direction Friday from CBOT corn and soybeans, he said.

 

Weakness in outside markets was a bearish influence on the grains, a trader said. Crude oil stumbled on strength in the U.S. dollar and weak demand.

 

In other news, weekly U.S. wheat export sales of 457,300 metric tonnes were seen as solid and slightly above trade estimates, which ranged from 250,000 to 450,000 tonnes. Sales of hard red winter wheat were 140,600 tonnes, and sales of soft red winter wheat were 118,400 tonnes, according to the USDA.

 

 

Minneapolis Grain Exchange

 

Trading was quiet at the MGE ahead of the report. Traders expect to see the USDA bump up its world wheat production estimate, with increases in Canada, the Black Sea region and E.U.

 

The USDA could trim its forecast for Australia's crop by a few million tonnes due to dryness. The agency in August estimated the crop at 25 million tonnes, although recent private estimates from Australia have been lower. Rabobank Australia Thursday estimated wheat production at around 21 million metric tonnes.