CFTC announcement impacts grain futures

Market Line August 20, 2009 Wheat futures started with gains Wednesday on news that Egypt purchased 120-thousand metric tons of U.S. soft wheat in addition to buying from France, Russia and Canada. Then the market turned down on an announcement from the Commodity Futures Trading Commission. Lynn Smith with the Zaner Group explains what happened.

Smith: “The CFTC revoked permission to a unit of Deutche Bank and another entity that would allow them to legally avoid trading limit on corn, wheat and soybeans. When they made that announcement there was a knee-jerk reaction to the downside because a lot of the trades know the index funds have huge long positions and the question is the timing when they can be forced to get out of these contracts.”

Reports from Canada say some Alberta crops are two to four weeks behind in development which could mean a small part of the spring wheat crop could be hurt by frost.

On Wednesday Chicago September wheat was down 4 ½ cents at 4-66. September corn was up 5 ½ at 3-20. Portland soft white wheat steady to down a nickel at mostly 4-82. Club wheat mostly 6-57. HRW 11.5 % protein two to six cents lower at 5-36. DNS 14% protein two to four cents lower at 6-16. No Portland barley bids.

Cattle futures were lower Wednesday. There was some uneasiness about tomorrow’s USDA Cattle on Feed report. The cash fed trade had yet to develop. October live cattle down 17 cents at 88-67. October feeders down two cents at 101-20. September Class III milk up 23 cents at 12-81.

I’m Bob Hoff and that’s Market Line on the Northwest Ag Information Network.

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