US Wheat Review on Monday: Rallies on CBOT corn, soy strength

 

 

Spillover support from rallies in Chicago Board of Trade corn and soy pulled U.S. wheat futures sharply higher Monday, traders said.

 

CBOT December wheat climbed 26 1/4 cents at US$4.94 1/4 a bushel. Kansas City Board of Trade December wheat soared 26 cents to US$5.11, and Minneapolis Grain Exchange December wheat jumped 21 1/2 cents to US$5.25 1/2.

 

Wheat was looking toward the neighboring CBOT corn and soy markets for direction amid a lack of fresh news, traders said. Corn and soy rallied on worries about harvest delays and technical buying, they said.

 

"Can you say follower?" said Dave Marshall, an independent marketing advisor and commodities broker. "The wheat market has been trying to find a reason to rally. They've been looking at corn and soy pits for that incentive."

 

The delayed soy harvest is slowing the planting of soft red winter wheat in some areas because many growers seed wheat following soy, Marshall said. SRW wheat is grown in the eastern third of the country and used to make pastries and snack foods.

 

CBOT December wheat hit a session high of US$4.96 1/2 in electronic trading, its highest price since Sept. 1. Commodity funds bought an estimated 4,000 wheat contracts at the CBOT.

 

Non-commercials speculative funds hold a large net short position in CBOT wheat, which helps fuel gains, a trader said. Speculative funds were net short 60,191 contracts as of Oct. 6, up from 59,276 contracts as of Sept. 29, according to a supplemental Commodity Futures Trading Commission report.

 

 

Kansas City Board of Trade

 

KCBT wheat closed higher on borrowed strength from CBOT corn and soy, traders said. Weakness in the U.S. dollar added support as a soft dollar makes U.S. grain more attractive to foreign buyers, they said.

 

Fundamentals for wheat remain weak. There is a lot of wheat to go around in the world, and export demand for U.S. wheat remains is lackluster.

 

KCBT December wheat hit a session high of US$5.13 in electronic trading, its highest price since Sept. 3.

 

 

Minneapolis Grain Exchange

 

MGE December wheat hit a session high of US$5.29 1/2, its highest price since Sept. 1.

 

Traders are waiting for the U.S. Department of Agriculture to issue weekly export inspections and crop progress data Tuesday. The reports were delayed a day due to the Columbus Day holiday.

 

In other news, Saudi Arabia during the weekend bought 550,000 tonnes of hard Canadian wheat in a tender, traders said. It was not surprising the U.S. was snubbed because there has been talk that Canada was not at the point it wanted to be in its export sales program, Marshall said. Protein levels in U.S. wheat also have been down this year.