US Wheat Review on Thursday: Finishes weaker but pares losses

 

 

U.S. wheat futures trimmed losses and closed slightly lower Thursday as traders continued to watch activity in outside markets.

 

Chicago Board of Trade December wheat slipped 1/2 cent to US$5.55 1/4 per bushel. Kansas City Board of Trade December wheat lost 2 cents to US$5.88, and Minneapolis Grain Exchange December wheat dropped 6 1/4 cents to US$6.32 1/4.

 

Wheat traded both sides during the day session, as the stock market gyrated. Late strength in equities opened the door for some short-covering in wheat, a CBOT floor analyst said.

 

CBOT December wheat set a fresh 16-month low of US$5.43 in early dealings before trimming losses. Wheat is overdue for a technical bounce after recent sell-offs, a trader said.

 

In general, funds continued to trim positions in commodities and to move to cash, an analyst said. Fundamentals remained in the backseat for the grains but could take a more prominent role if outside markets stabilize, he said.

 

"If we can start to see some stability in the financial sector, by that I mean stocks and crude oil, I believe the grain markets may start to disjoin a little bit and return to their fundamentals," an analyst said.

 

Forecasts for increased global production remain bearish for wheat, an analyst said. Strategie Grains raised its forecast for the European Union 2008-09 soft wheat production by 1.9 million tonnes to 139.5 million tonnes.

 

 

Kansas City Board of Trade

 

KCBT wheat continued to watch outside markets, with traders stepping to the sidelines, a trader said. The grains felt pressure from crude oil, in particular, he said. Trading was choppy and thin.

 

Rains in Kansas are causing "a fair share of heartburn and concern about when the ground will dry enough to complete wheat planting," according to Kansas Wheat, the cooperative agreement between the Kansas Wheat Commission and the Kansas Association of Wheat Growers. But there is plenty of time left to plant wheat this fall in expectation of a profitable harvest next summer, said Jim Shroyer, extension agronomist at Kansas State University.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower with the other markets. MGE December wheat hit a session low of US$6.22, the lowest price for a nearby contract since August 2007, before trimming losses.

 

The USDA is scheduled at 8:30 a.m. EDT Friday to issue its weekly export sales report. Analysts expect wheat sales for the week ended Oct. 9 to be 400,000 to 600,000 tonnes.