US wheat futures rose 3 percent on the Chicago Board of Trade on Friday as a rally in crude oil to a record high and a drop in the dollar sparked a broad rally in commodities, traders said. Crude oil futures exploded above $139 a barrel on dollar weakness, remarks by Israel's transport minister that an attack on Iranian nuclear sites looked "unavoidable" and a Morgan Stanley report predicting oil could reach $150 by July 4.
The Reuters-Jefferies CRB Index of 19 commodity prices hit an all-time high at 441.57. The index's previous peak was 435.53 on May 22. The wheat rally came despite seasonal harvest pressure and trade expectations that USDA will raise the US wheat production estimate in its June 10 supply/demand report.
"The wheat market is caught up in the commodity frenzy. Even though the numbers moving forward are more bearish than last year, there are too many people trading commodities that don't care about supply and demand," said Skip Searcy, a trader with Newedge USA.
At the Chicago Board of Trade, July soft red winter wheat settled up 25-1/2 cents, 3.2 percent, at $8.11 per bushel, with back months up 13 to 27 cents. Spreading helped boost futures volume to an estimated 120,488 contracts; options volume at 10,852 lots.
Commodity funds were big buyers of 10,000 CBOT wheat contracts, traders said. Iowa Grain for a third day spread at least 1,000 July 2009/July 2008 contracts, possibly for Deutsche Bank, traders said. Bullish moves in wheat options added support, triggering fund short-covering in futures as CBOT July crossed the $8.00 strike.
At the Kansas City Board of Trade, July hard red winter wheat settled up 32-1/4 cents at $8.46-3/4 a bushel, with back months up 19 to 36 cents. KCBT volume was estimated at 24,026 contracts.
At the Minneapolis Grain Exchange, July spring wheat settled up 57-1/4 cents at $10.27-1/4 a bushel, with new-crop September up 35 cents at $9.12. MGE volume was estimated at 3,894 contracts. MGE July rallied on light bull-spreading, with the inverted July/September spread trading out to $1.20 to $1.25, premium July, up from 95 cents on Thursday. Protein premiums in the spring wheat cash market were steady to 20 cents higher Friday, but down more than $1.50 for the week.
Protein premiums for hard red winter wheat jumped as much as 30 cents a bushel Friday as mills sought new-crop supplies amid growing evidence of low protein in newly harvested wheat. Storms halt hard red winter wheat harvest in Oklahoma, with winds of up to 80-90 mph causing damage in some fields. Australian wheat prices swing on scent of rain.
Comments
Comments are closed.