US WHEAT REVIEW: Pulls Back From Gains On Profit-Taking
Profit-taking drove down U.S. wheat futures Friday following a strong two-day rally.
Soft red winter wheat for March delivery, the most-active contract, ended down 10 1/4 cents, or 1.3%, at $7.73 1/4 a bushel at the Chicago Board of
Trade. That's down 1% on the week. The market closed lower Monday and Tuesday before rising Wednesday and Thursday with corn and soy futures.
The markets retreated Friday, even as neighboring corn and soy futures extended gains for a third day, because wheat supplies aren't as tight as
supplies of other crops, analysts said. Grain and soy futures climbed Wednesday and Thursday after the U.S. Department of Agriculture, in a monthly crop
report, cut its supply outlooks.
"The wheat markets traded lower on profit-taking after the recent upward movement," said Ami Heesch, analyst for Country Hedging.
Although total wheat supplies are ample, traders remain worried about supplies of high-quality wheat suitable for milling into flour due to global
production problems. A summer drought hurt output in Russia, while heavy rains lowered the quality of wheat in Australia and Canada.
Quality concerns should continue to support Kansas City Board of Trade and Minneapolis Grain Exchange hard wheat futures over lower-protein CBOT soft red
wheat futures, traders said. KCBT and MGE wheat futures suffered more modest losses than CBOT Friday.
Hard red winter wheat for March delivery fell 8 1/2 cents, or 1%, to $8.60 a bushel at the KCBT. Hard red spring wheat slipped 3 1/2 cents, or 0.4%, to
$8.90 1/4 a bushel at the MGE.
The price break is good for export business because "buyers will look to get something done on a down market," according to commodity brokerage FC Stone.
Weekly U.S. wheat export sales, issued Thursday for the week ended Jan. 6, were poor at 147,300 tons.
Rice Futures
U.S. rice futures closed higher for the second-consecutive day on concerns about farmers' plans to reduce plantings and grow other crops, such as soybeans
and cotton, analysts said. U.S. farmers are preparing to sow less rice this spring after rice futures sagged in 2010 as corn, soybeans and cotton futures
surged on supply worries.
In international news, deadly floods hit a main rice-growing area of Sri Lanka. Still, global rice supplies are considered large.
CBOT March rice closed up 16 1/2 cents, or 1.2%, at $14.01 a hundredweight.
