US Wheat Review on Tuesday: Hits 3-month highs on technicals, funds

 

 

U.S. wheat futures rallied to fresh three-month highs Tuesday on technical buying and fund money flowing into the markets, traders said.

 

Chicago Board of Trade March wheat closed up 26 3/4 cents at US$6.43 1/2 per bushel. Kansas City Board of Trade March wheat surged 27 3/4 cents to US$6.70, and Minneapolis Grain Exchange March wheat climbed 27 1/4 cents to US$6.84 1/2.

 

Technical buying came in and shorts covered their positions as the markets took out recent highs, traders said. CBOT March wheat reached a session high of US$6.45, its highest price since Oct. 3.

 

"We haven't had a lot of news out there that would [justify] this strong of a movement for the market," said Larry Glenn, broker and analyst at Frontier Ag. "You've got technical buying in there. You've got funds coming in and doing some buying today."

 

Gains in CBOT soybeans spilled over into wheat amid concerns about dryness in South America, traders said. There is a "decent tender line-up" from countries looking to buy wheat on the world market, an analyst said.

 

Jordan said it is tendering to buy 100,000 metric tonnes of wheat of optional origin, on a cost and freight basis, for shipment in April and May. Saudi Arabia also is reportedly tendering for wheat, traders said.

 

 

Kansas City Board of Trade

 

KCBT March wheat hit and closed at a session high of US$6.70, its highest price since Oct. 9. Fund buying and follow-through strength from a strong close Monday helped boost prices, a trader said.

 

The markets should be able to extend gains as bulls have upside technical momentum on their side, an analyst said. Prices have been in an uptrend since Dec. 5, he said. KCBT March wheat has climbed US$1.69 since falling to a low of US$5.01 on Dec. 5.

 

"We've got to believe" there is more upside left to the rally, Glenn said. "I wouldn't have believed we'd see this much strength at the end of the year or at the beginning of the year, but it's convinced me now. I see some more strength there to it."

 

 

Minneapolis Grain Exchange

 

MGE March wheat hit a session high of US$6.85 3/4, its highest price since Oct. 9. The rally in soybeans and early gains in crude oil added to the bullish tonnee for wheat, a trader said.

 

There are concerns recent rallies are making the U.S. less competitive for export business on the world market, a trader said. The U.S. lately has faced stiff competition for export sales from the Black Sea region.