US Wheat Review on Friday: Higher; rebound from recent losses

 

 

U.S. wheat futures were mostly higher Friday in a rebound from recent losses, but the markets closed off session highs after a round of late selling.

 

Chicago Board of Trade December wheat rose 4 1/4 cents to US$6.40 1/4 per bushel, down 75 3/4 cents on the week. Kansas City Board of December wheat jumped 1 3/4 cents to US$6.70 1/2, down 75 1/4 cents on the week. Minneapolis Grain Exchange December wheat slipped 1 1/4 cents to US$7.02 3/4, down 87 cents on the week.

 

Profit-taking by holders of short positions boosted prices during the day session, said Dave Marshall, an independent marketing advisor and commodities broker. The markets were due for a bounce after heavy sell-offs earlier in the week, analysts said.

 

The markets trimmed gains heading into the close amid ongoing uncertainty about the economy, Marshall said. CBOT December wheat ended 13 3/4 cents off its session high of US$6.54.

 

"It seems like every weekend we lose a bank," Marshall said. "Heaven knows there's been a lot of liquidation among the commodity funds and traders all week long."

 

The U.S. House of Representatives, wary of growing economic distress, approved a US$700 billion financial bailout package Friday. The 263-171 vote was watched by traders and represented a reversal from Monday, when lawmakers vote down a narrower version of the plan.

 

Next week, the market should pay more attention to weather reports in soft red wheat areas of the eastern Midwest, Marshall said. Winter wheat seeding is underway but has been delayed in areas due to the slow soybean harvest.

 

Recent weakness in wheat prices is discouraging farmers from planting wheat, Marshall said. It is a turn-around from last year when rising prices provided an incentive for expanded seedings.

 

 

Kansas City Board of Trade

 

KCBT wheat rose in a bounce from heavy selling, including a roughly 5% drop on Thursday. The market pared advances late, with KCBT December wheat ending 15 1/2 cents off its session high of US$6.86.

 

A setback in crude oil was seen as somewhat of a bearish influence late in the session, a trader said. The grains are tied to energy markets because funds often trade in a basket of commodities and because corn is used for ethanol.

 

"We've just been following this crude oil market just up and down," a trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures slid into negative territory as the other markets pulled back late. MGE December wheat ended 16 3/4 cents off its session high of US$7.19 1/2.

 

Projections for increased supplies of U.S. hard spring wheat, traded at the MGE, and for a bigger Canadian crop continue to hang over the market, a trader said.