CHICAGO (Dow Jones)–U.S. wheat futures are expected to slide on Tuesday’s
open following overnight losses on a stronger dollar and continued
profit-taking after the market’s sharp rally last week.
Chicago Board of Trade futures are called 4 cents to 6 cents lower. In
overnight trade, CBOT September wheat was down 6 cents to $5.76 1/4 per bushel
and December wheat was down 5 1/2 cents to $6.06.
Kansas City Board of Trade September wheat was down 4 cents to $5.91 1/4 per
bushel and MGEX September wheat was down 2 cents to $6.01 1/4.
The CBOT market gained 8.3% last week but has fallen the past couple of days
on profit-taking and spillover pressure from corn and soybeans. Those markets
remain weak Tuesday morning, and a stronger dollar will add to the pressure,
traders said.
“With the weather market not manifesting and the outside markets not
supporting, this early part of the week so far has been one for the bears, and
one for the technicians who continued to talk about how overbought daily charts
were going into last Friday,” said Mike Zuzolo, president of Global Commodity
Analytics and Consulting.
Underpinning the market are crop troubles in Europe and Russia, due mostly
to drought. The reduced crops could bring more export business to the U.S.,
traders say. But they also note that world supplies are adequate and U.S.
supplies are ample, which should limit the market’s upside potential. For now,
demand for U.S. wheat remains weak, traders said.