January 23, 2007

 

US Wheat Review on Monday: Finishes lower, unable to hold late gains

 

 

U.S. wheat futures settled lower Monday in thin, choppy trade, staging a recovery to higher levels late in the session but unable to hold those gains as nearby corn futures retreated near the close to finish lower on the day, sources said.

 

CBOT March wheat settled 2 cents lower at US$4.65, KCBT March slipped 2 1/4 cents to US$4.87, and MGE March also fell 2 cents to US$4.96.

 

Wheat in Chicago and Kansas City traded down near support levels but held and that brought in some light buying interest, said Jason Britt, an analyst with Central States Commodities in Kansas City, Missouri.

 

However, the absence of additional buying and the late retreat in corn futures reversed the gains, a floor analyst said.

 

Wheat trading was quiet for much of the session despite a sale of 55,000 metric tonnes of soft red wheat to Egypt over the weekend, and a sale of 195,000 tonnes of hard red wheat to Nigeria. Floor sources termed the sales as routine.

 

Weekly export inspections were slightly better than expected with the U.S. Department of Agriculture reporting that wheat inspected for export for the period ending Jan. 18 totaled 20.2 million bushels, slightly above the 13-20 million forecast by analysts.

 

Beneficial weekend weather with 6-7 inches of snow in the hard red winter wheat belt and snow and rain in soft red wheat growing areas was also cited as a negative, though Britt noted those areas have received good moisture to date and the additional moisture was becoming "old news."

 

Wheat has been following corn and will continue to until something fundamental changes, said analysts at both the CBOT and MGE.

 

In the eastern U.S. Midwest soft red wheat growing region, mainly dry conditions are forecast over the next several days with temperatures expected to average near-to-above normal Tuesday and Wednesday, said DTN Meteorologix Weather.

 

In CBOT trades, Fimat bought 400 March and JP Morgan sold 500 May.

 

Commodity fund selling was estimated at 1,000 contracts.

 

 

Kansas City Board of Trade

 

Modest technical buying late in the session provided thin support for hard red wheat futures in light volume but the weakness in CBOT corn on the close helped eliminate the gains, a KCBT floor source said.

 

Snowfall over the weekend with 6-to-7 inches received in much of the hard red winter wheat belt also contributed to the lack of buying interest as the snow fall provided additional moisture and coverage for the dormant crop, a KCBT source said.

 

Mostly dry conditions are forecast through Wednesday with temperatures below normal Tuesday and above-normal Wednesday, DTN Meteorologix Weather said.

 

In midday KCBT trades, Country Hedging was noted buying 100 May, JP Morgan sold 200 March and Frontier sold 100 July.

 

 

Minneapolis Grain Exchange

 

Trading was "awfully slow" with spring wheat continuing to look to corn futures for direction, an MGE floor source said. Cash selling of spring wheat remains light as producers are waiting for US$5.00 cash wheat, the source added.