US Wheat Review on Thursday: Closes higher on technical buying, crude

 

 

Technical buying helped lift U.S. wheat futures modestly higher Thursday as the markets rebounded a bit from losses Wednesday.

 

Chicago Board of Trade December wheat rose 6 cents to US$7.36 1/4 a bushel. Kansas City Board of Trade December wheat jumped 6 1/4 cents to US$7.65 1/4, and Minneapolis Grain Exchange December wheat climbed 9 1/4 cents to US$8.05 3/4.

 

Gains in crude oil helped boost wheat, despite a slide in the neighboring CBOT corn and soybean markets, an analyst said. Volume remained thin amid continued uncertainty about the details of the government's plan for a US$700 billion bailout of U.S. financial markets, he said.

 

"The markets are just real choppy at this time with the whole bailout issue," he said. "That seems to be a distraction."

 

Export news did not help support the rally, traders said. Egypt's General Authority for Supply Commodities booked 120,000 tonnes of Russian wheat in a tender and none from the U.S.

 

It will be tough for the U.S. to compete with wheat exports from the Black Sea until cheaper supplies from the region are absorbed into the world market, a trader said. Iraq said earlier this week it bought 100,000 to 200,000 tonnes of Russian wheat and none from the U.S.

 

The Egypt business is "business that we need," an analyst said. "Once these cheaper supplies are sold out (from the Black Sea), we'll be more competitive in the world markets."

 

 

Kansas City Board of Trade

 

KCBT wheat rose amid supportive signals from firm crude oil and CBOT wheat, a floor trader said. Activity remained slow in the pit, he said.

 

"We're definitely a follower," the trader said.

 

KCBT December wheat achieved a short-term objective of US$7.66-US$7.67, a KCBT trader said. The contract hit a session high of US$7.69 before trimming gains.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures also were a follower of CBOT wheat in thin volume, a floor trader said. Traders hadn't expected the U.S. to secure any business in Egypt's tender, he said.

 

Weekly U.S. wheat export sales were below expectations at 284,300 tonnes, a marketing-year low. Analysts had expected sales of 400,000 to 500,000 tonnes.

 

Sales of hard red spring wheat, the kind traded at the MGE, were 129,000 tonnes of the total, according to the U.S. Department of Agriculture. Hard red winter wheat sales were 36,200 tonnes, while soft red winter wheat sales were 97,200 tonnes.