January 9, 2006

  

US Wheat Outlook on Monday: Down 3-4 cents on technicals, weak soy calls

 

 

U.S. wheat futures were called to open down 3-4 cents per bushel Monday on follow-through technical sales as weak overnight prices followed last week's late retreat, brokers said.

 

Calls for a sharply lower open in Chicago Board of Trade soybean futures, on unexpected weekend rains in Argentina's soy belt and forecasts for more, should also weigh on U.S. wheat futures, they noted.

 

In the overnight e-CBOT session, most-active March wheat at the CBOT closed down 4 1/4 cents at US$3.26 1/2 per bushel.

 

The CFTC reported Friday that speculators for CBOT wheat futures sharply pared their net short position for the week ended Jan. 3. They decreased short holdings by 13,088 lots to hold 76,112 short positions and increased their long holdings by 477 lots to hold 57,743 long positions.

 

For CBOT wheat futures and options combined, speculators were short 71,978 lots, down 14,494 contracts from the week before, and long 56,629 contracts, up 1,451 lots from the previous week.

 

For Kansas City Board of Trade wheat futures only, speculators for the week ended Jan. 3 boosted their net long stance. They increased their long holdings by 6,534 lots to hold 50,800 long positions and decreased their short holdings by 347 lots to hold 3,712 short positions.

 

For KCBT wheat futures and options combined, speculators were long 52,537 lots, up 6,837 contracts, and short 3,549 contracts, down 608 lots from the previous week.

 

For Minneapolis Grain Exchange spring wheat futures only, speculators for the week ended Jan. 3 increased their net long position, boosted long holdings by 1,587 lots to 9,693 lots and decreasing short holdings by 52 lots to 881 lots.

 

For MGE spring wheat futures and options combined, speculators also boosted their net long position, increasing long holdings by 1,630 lots to 9,315 contracts and decreasing short holdings by 63 lots to 891 contracts.

 

Cash U.S. hard red winter wheat basis bids were steady to weak Monday; soft red winter wheat basis bids were also steady to weak, with an 8-cent loss in Chicago; and spring wheat basis bids were mostly steady to up 8 cents for the spot Minneapolis rail bid, grain merchandisers said.

 

Dry conditions were forecast for the droughty southern Great Plains hard red winter wheat belt through Wednesday, according to Meteorlogix weather service.

 

However, wildfires that have blackened more than 609,000 acres of grass and brush in Texas and Oklahoma over the last two months have affected a very small percentage of total farmland in both states, according to Dow Jones Newswires calculations using figures from federal and state departments of agriculture.

 

Overnight U.S. wheat export sales were quiet.

 

In global wheat news, India wheat plantings covered 25.3 million hectares in the Nov. 1-Jan. 9 period, compared with 24.9 million hectares in the year-earlier period, the Ministry of Agriculture said Monday.

 

Moreover, state-run Food Corp. of India, or FCI, will release about 200,000 metric tonnes of wheat in the local market to flour mills in January to ensure adequate supplies and keep prices under check, a senior company executive said Monday. He also noted that imports weren't necessary in the near-term.