US Wheat Review on Wednesday: Ends mixed in choppy, pre-holiday trade
U.S. wheat futures closed mixed Wednesday as traders evened up positions in range-bound activity ahead of first-notice day and the Thanksgiving holiday.
Chicago Board of Trade March wheat rose 1 1/4 cents to US$5.54 per bushel. Kansas City Board of Trade March wheat slipped 3 3/4 cents to US$5.76, and Minneapolis Grain Exchange March wheat shed 3 cents to US$6.11 1/4.
CBOT wheat traded both sides before ending higher amid some positioning, a trader said. The markets will be closed Thursday for Thanksgiving and have an abbreviated trading session Friday.
Volume was light, as some market participants left early or took the day off. Traders didn't want to push the markets too hard in either direction, said Jason Britt, president of Central State Commodities.
"Non-committal would be my best explanation today," he said. "Really no one wanted to be really exposed on the long side or the short side. There's just not a lot to sink your teeth into on the bull or the bear side here for the moment."
Commodity funds bought an estimated 1,000 contracts. Market participants continued to roll positions to March from December ahead of first-notice day Friday, a trader said.
First-notice day is the first day on which notices of intention to deliver actual commodities against futures-market positions can be received. Analysts and traders predicted deliveries will be heavy at 1,000 to 4,500 contracts.
CBOT December wheat continues to eye US$5 as a solid support level, with the market attracting "willing sellers" around US$5.55 to US$5.60, Britt said. The contract closed up 1 1/2 cents at US$5.35 1/2.
After the close, Egypt's state-owned General Authority for Supply Commodities said it would tender Thursday to buy at least 55,000 to 60,000 metric tonnes of wheat for shipment Dec. 21-31 on a free-on-board basis. The deadline for bids is 1200 GMT Thursday.
The U.S. Department of Agriculture on Friday will issue its weekly export sales report, one day later than usual because of Thanksgiving. Analysts expect wheat export sales to total 300,000 to 500,000 tonnes.
Kansas City Board of Trade
Market participants continued to trade the December/March spread, which closed at 17 1/2 cents, a KCBT trader said. The spread also closed at 17 1/2 cents Tuesday.
Volume was thin ahead of Thanksgiving. Traders kept an eye on the stronger U.S. dollar, which is seen as bearish for grains because it gives foreign countries less buying power to import commodities, a KCBT floor trader said.
"They're always watching the dollar," he said. "We kind of thought we'd have another narrow, two-sided choppy trade today ahead of the weekend."
Deliveries against KCBT December wheat on Friday should be about 200 to 400 contracts, a trader said.
Minneapolis Grain Exchange
MGE wheat closed lower in light volume. There was minimal flat price action, a floor trader said. Some early spreading of MGE wheat against KCBT wheat dried up by midday, he said.
There was "a little bit of a squeeze" in MGE December wheat as people tried to get out ahead of first-notice day, the trader said. He predicted deliveries would total 200 to 400 contracts for the course of the delivery period.
MGE December wheat closed down 4 3/4 cents at US$6.01. The December/March spread widened to close at 10 1/4 cents from 8 1/2 cents Tuesday.