US wheat futures closed modestly lower on Friday amid pressure from a strengthening US dollar, although a late rally in crude oil helped lift wheat from session lows near the close, traders said. Late end-of-month fund buying fuelled the late session bounce, along with spillover support from crude oil, which bounced from earlier lows to finish $2 a barrel higher.
Chicago Board of Trade December soft red winter wheat traded as much as 14 cents per bushel lower during the day, but rebounded late to close 1-3/4 cents lower at $5.36-1/4 per bushel; March ended down 2 cents at $5.56-3/4. Funds were net sellers of about 1,000 wheat contracts, traders said. Traders spread CBOT December and March contracts nearly 21,000 times.
CBOT December closed below its the 20-day moving average of $5.63-1/2. At the Kansas City Board of Trade, December hard red winter wheat settled down 1/2 cent at $5.73 bushel; March was off a penny at $5.90-1/2. Minneapolis Grain Exchange December spring wheat ended 1/2 cent higher at $6.47-1/2 per bushel; March was down 1/2 cent at $6.34-1/2.
Firm cash market for spring wheat continued to support MGE December contract against back months; December-March spread traded at an inverse of 10 to 13 cents, premium December. Declining prices and the distraction of corn/bean harvest in the Dakotas limited spring wheat sales. - MGE trader
CBOT wheat volume was estimated at a moderate 72,940 futures and 9,642 options. KCBT wheat volume was estimated at 9,749 futures; MGE at 3,947 futures. Rising US dollar seen hurting competitiveness of US wheat on the world market, while global supplies are ample. The US dollar saw sharp gains as investors turned more cautious after bleak economic data heightened global recession fears.
The greenback posted its biggest monthly gain against a basket of currencies in more than 17 years. Highlighting the recent sluggish wheat export pace, Japan bought less wheat than anticipated for the fifth consecutive tender, and none was US wheat.
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