Friday CBOT Closing Comments: Wheat
Wheat finished around 12c higher on what is being called "short-covering and technical buying" despite a neutral/bearish USDA report.
The USDA estimated 2008-09 U.S. wheat carryout at 537 million bushels, compared to the average analyst estimate of 538 million and the agency's June estimate of 306 million. The government's projection for all winter wheat production of 1.864 billion bushels was above the average analyst estimate of 1.852 billion.
The US is still in the middle of harvesting winter wheat and things are looking pretty good. The chances are that the 1.864 billion production number will get bigger as time goes on.
"Combines are in northern Kansas, finding much better-quality (HRW) wheat,along with yields that continue to impress. Even northwest Kansas, which was still in the drought region, has seen areas of 40-60-bushel yields, proteins understandably high in the 12-16% range, and (test) weights also impressive, of up to 64 pounds (per bushel)," said Spectrum Commodities analyst Louise Gartner.
The USDA also upped its Australian 2008 crop estimate 1mmt, and pegged the world crop higher than last months as well.
All this, yet the market closes higher, a further indication that the futures markets are becoming further divorced from the reality of the cash markets? It would seem so as CIF HRW wheat basis reportedly fell 4-10c last week and HRS basis fell 25 cents.
Still on the week as a whole seasonal harvest pressure and weak export demand eroded cash winter/spring wheat prices this week, slashing spot HRW/HRS/SRW futures by about 38-57 cents.
Certainly the US aren't going to find themselves awash with export interest now that the combines are rolling in the Black Sea regions. Sure, they will pick up their usual orders from South Korea, Japan and the like but any interest from the likes of Egypt and Pakistan will be eagerly mopped up by Russia and the Ukraine.
The USDA estimated 2008-09 U.S. wheat carryout at 537 million bushels, compared to the average analyst estimate of 538 million and the agency's June estimate of 306 million. The government's projection for all winter wheat production of 1.864 billion bushels was above the average analyst estimate of 1.852 billion.
The US is still in the middle of harvesting winter wheat and things are looking pretty good. The chances are that the 1.864 billion production number will get bigger as time goes on.
"Combines are in northern Kansas, finding much better-quality (HRW) wheat,along with yields that continue to impress. Even northwest Kansas, which was still in the drought region, has seen areas of 40-60-bushel yields, proteins understandably high in the 12-16% range, and (test) weights also impressive, of up to 64 pounds (per bushel)," said Spectrum Commodities analyst Louise Gartner.
The USDA also upped its Australian 2008 crop estimate 1mmt, and pegged the world crop higher than last months as well.
All this, yet the market closes higher, a further indication that the futures markets are becoming further divorced from the reality of the cash markets? It would seem so as CIF HRW wheat basis reportedly fell 4-10c last week and HRS basis fell 25 cents.
Still on the week as a whole seasonal harvest pressure and weak export demand eroded cash winter/spring wheat prices this week, slashing spot HRW/HRS/SRW futures by about 38-57 cents.
Certainly the US aren't going to find themselves awash with export interest now that the combines are rolling in the Black Sea regions. Sure, they will pick up their usual orders from South Korea, Japan and the like but any interest from the likes of Egypt and Pakistan will be eagerly mopped up by Russia and the Ukraine.