CHICAGO: Deliveries of wheat against Chicago Board of Trade futures should be heavy on Thursday, which is first notice day for CBOT July grain deliveries, traders and analysts said Wednesday.

First-day CBOT wheat deliveries generally were estimated at 500 to 1,200 contracts, although Roy Huckabay with Linn Associates, a Chicago brokerage, said wheat deliveries could reach 2,000 or 3,000 contracts.

For corn, most sources estimated July deliveries at zero to 200 contracts. Soybean deliveries were estimated at zero to 875 contracts, soyameal at zero to 300 contracts and soyaoil at 1,500 to 3,000 contracts.

Traders closely monitor deliveries because heavy deliveries tend to pressure the price of a nearby futures contract, while a low number would tend to support prices.

For wheat, current cash prices are lower than futures delivery equivalents, analysts said, a factor that should encourage commercial firms to deliver wheat against CBOT futures.

“The crop outlook could not be more favorable, and it’s not like the demand is that robust,” said Dan Cekander, president of DC Analysis.

Hard red winter wheat from the US Plains can be delivered against CBOT soft red winter wheat futures, Huckabay noted.

“You’ve got all this hard wheat flowing into Chicago and St. Louis. I think the registrations will pop this afternoon,” Huckabay said.

The amount of grain registered with the exchange can act as an indication of delivery prospects. As of Tuesday night, the CBOT reported registrations of 1,096 contracts of wheat, 66 corn, 875 for soyabeans, 178 soyameal and 5,967 for soyaoil.

Commercial firms have until 4 p.m. CDT (2100 GMT) to register additional contracts for delivery.

During a contract’s delivery period, which lasts two to three weeks, the futures market acts like a cash market. Firms holding short positions in CBOT July futures can issue intentions to deliver the physical commodity. Traders holding the oldest-date longs must accept delivery.—Reuters