January 10, 2006

US Wheat Outlook on Tuesday: Up 1-2 cents on firm e-CBOT trade

U.S. wheat futures were called to open up 1-2 cents per bushel Tuesday following firm overnight prices after the recent break to near 3-week lows in bellwether Chicago Board of Trade March wheat amid a lack of aggressive index fund buying, brokers said.

Calls for a 2-4 cent higher open in CBOT soybean futures Tuesday were also supportive, they said.

In the overnight e-CBOT session, most-active March wheat at the CBOT closed up 2 cents at US$3.28 1/2 per bushel.

First resistance was seen at US$3.28 1/4--Monday's high--and then at US$3.30 1/4--the top of Monday's downside price gap. First support was put at US$3.23 3/4--Monday's low--and then at US$3.20.

Cash U.S. hard red winter wheat basis bids were mostly steady to weak Tuesday; soft red winter wheat basis bids were mixed, with a 7-cent gain in Cincinnati and a 1-cent loss in St. Louis; and spring wheat basis bids were weak, with 5-cent losses in the Minneapolis rail, Duluth, Aberdeen and Portland, Ore. bids, grain merchandisers said.

In wheat export news, Japan sought 61,000 tonnes of wheat in an overall tender for 146,000 tonnes that will be concluded Thursday.

Syria postponed a tender to sell 100,000 metric tonnes of Syrian wheat until Jan. 16, and Taiwan bought 30,000 tonnes of Australian wheat.

In global wheat news, the managing director of India's state-run Food Corporation said imports were not necessary or expected ahead of the country's harvest in March.

The French state grains board, Office National Interprofessionnel des Cereales, or ONIC, Tuesday estimated 2005-06 French soft wheat output at 35.714 million metric tonnes, just below the December forecast of 35.697 million tonnes, but slightly above the 35.569 million tonnes estimated a year ago.