US Wheat Review on Wednesday: Trims losses as markets eye CBOT corn, soy

 

 

U.S. wheat futures finished mostly lower Wednesday but trimmed losses before the close as the markets tracked neighboring Chicago Board of Trade corn and soy, traders said.

 

CBOT December wheat closed down 3 1/4 cents at US$4.67 1/4 a bushel. Kansas City Board of Trade December wheat fell 2 1/4 cents to US$4.80, and Minneapolis Grain Exchange December wheat rose 1/4 cent to US$4.99 3/4.

 

Wheat tracked corn and soy as the row crops reacted to weather forecasts that reduced the threat of a frost next week, traders said. The markets were due for a profit-taking setback after rallying Tuesday on worries about the potential for crop damage from a frost, they said.

 

The cold weather would hurt corn and soy but not wheat. Winter wheat is starting to be planted, while spring wheat is being cut.

 

"Wheat's along for the ride," said Dale Durchholz, analyst for AgriVisor. "There's nothing more, nothing less you can say about wheat."

 

Fundamentals for wheat remain weak, with world supplies considered large and export demand seen as lackluster, traders said. Egypt, a major buyer on the world wheat market, on Tuesday snubbed the U.S. and bought 240,000 tonnes of Russian wheat in a tender.

 

Commodity funds sold an estimated 2,000 wheat contracts at the CBOT.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower as the market followed corn and soy in reacting to the reduced threat of frost damage, a trader said. Choppy trading is expected to continue as weather markets persist in corn and soy.

 

"Yesterday was (about) anticipating cold temperatures," the trader said. "Today was more realistic."

 

There was a bullish option play at the KCBT. General Mills during the last two days has bought 2,000 December US$5 calls and sold US$4.20 puts from a range of 10 cents to 14 cents, a trader said.

 

 

Minneapolis Grain Exchange

 

MGE December wheat bucked the weaker trend and ended slightly higher after trading lower for most of the day session. Deferred months finished slightly weaker.

 

Traders are waiting to see the USDA's weekly export sales report, due out at 8:30 a.m. EDT Thursday. Sales of wheat for the week ended Sept. 10 are expected to be 350,000 tonnes to 550,000 tonnes, analysts said.