US Wheat Review on Wednesday: Ends higher, despite weak CBOT corn, soy

 

 

U.S. wheat futures extended gains in late trading Wednesday and closed higher, bucking losses in neighboring markets.

 

Chicago Board of Trade December wheat ended up 5 1/4 cents at US$5.21 a bushel. Kansas City Board of Trade December wheat gained 6 3/4 cents to US$5.26 3/4, and Minneapolis Grain Exchange December wheat added 6 3/4 cents to US$5.35 3/4.

 

The markets rose despite losses in neighboring CBOT corn and soy, which often influence wheat's direction. The row crops fell on fund selling and expectations that dry weather will encourage U.S. harvest progress.

 

There was a lack of fundamental news to propel wheat higher. World wheat supplies remain large, and export demand has been lackluster.

 

It seems as though there was a "little bit of correction in the corn/wheat spread," one trader said. Jason Britt, president of Central State Commodities, said that recently "wheat's kind of been the sell side of some of these spreads."

 

Strength in wheat was a turnaround from Tuesday, when the markets closed mostly lower in the face of gains in CBOT corn and soy. It felt as though "funds let off the gas a little bit" in the grains and soy after fund buying supported markets earlier in the week, a trader said.

 

 

Kansas City Board Of Trade

 

KCBT wheat finished higher as the market rose late in "very light volume," a trader said. It seems as though some people have left the market because they are distracted by the ongoing corn and soy harvest, the trader said.

 

"Harvest is in full bloom," the trader said.

 

After the close of trading, Egypt's state-owned General Authority for Supply Commodities said it was tendering to buy 55,000 to 60,000 tonnenes of wheat on a free on board basis. Traders will watch for the results Thursday. Egypt, a major buyer on the world wheat market, is known for being price sensitive.

 

The U.S. Department of Agriculture is scheduled to issue weekly U.S. export sales data at 8:30 a.m. EST Thursday. Export sales for wheat are expected to be 300,000 to 500,000 tonnenes.

 

 

Minneapolis Grain Exchange

 

MGE closed higher with the other wheat markets. The rally was not supported by supply/demand fundamentals, traders said.

 

Outside markets were supportive for wheat, they said. The U.S. dollar weakened, while crude oil and gold climbed. A soft dollar is often considered bullish because it makes U.S. grains more attractive to foreign buyers.