January 24, 2008

 

US Wheat Outlook on Thursday: 10-12 cents higher on rebound in outside markets

 

 

U.S. wheat futures are expected to start Thursday's day session mostly higher following a bounce in outside markets and firmer trade overnight, analysts said.

 

Benchmark Chicago Board of Trade March wheat is called to open 10 to 12 cents higher. In overnight electronic trading, CBOT March wheat rose 10 cents to US$9.l5.

 

Fears about a recession seems to have subsided a bit after the stock market posted a bullish reversal late Wednesday, an analyst said. The turnaround in equities allowed commodities to jump overnight and should encourage more of a rebound Thursday, he said.

 

CBOT and Kansas City Board of Trade wheat futures have fallen hard this week amid spillover pressure from weakness in outside equity markets. However, all three U.S. markets still have solid fundamental support amid worries about tight supplies, an analyst said. End users also may take turn up as buyers to take advantage of the break, he said.

 

Japan said it bought 215,000 metric tonnes of wheat, including 145,000 tonnes of U.S. wheat, in a routine tender concluded Thursday. The shipment is expected to arrive March 6 to May 10.

 

The Turkish state grain board purchased 100,000 tonnes of milling in a tender that closed Tuesday, according to a media report. All of the wheat was from Kazakhstan for shipment in February and March, the report said.

 

Minneapolis Grain Exchange spring wheat futures should lead the upside Thursday amid strong demand for spring wheat, traders said. Traders are trying to secure acres for spring wheat in a land fight with corn and soybeans.

 

CBOT wheat bulls' next upside price objective is to push and close March wheat above strong technical resistance at US$9.50, a technical analyst said. The next downside price objective for the bears is pushing and closing prices below solid support at US$8.79.

 

First resistance is seen at US$9.12 and then at US$9.20. First support lies at US$9.00 and then at US$8.90.

 

CBOT July wheat, which represents the new crop, slipped overnight as the contract continued to correct after closing out of line Tuesday, a CBOT floor trader said. The contract is expected to open on the defensive, he said.

 

At the KCBT, bulls' next upside price objective is pushing and closing March wheat above solid resistance at US$9.80, the technical analyst said. The bears' next downside objective is pushing prices below solid support at US$9.30, he said.

 

First resistance is seen at US$9.66 and then at US$9.80. First support is seen at US$9.50 and then at US$9.35.

 

No significant precipitation or cold weather is expected for hard red winter wheat, traded at the KCBT, in the U.S. central and southern Plains during the next five to seven days, DTN Meteorlogix said. The area should see a warming trend begin in the west on Thursday and spread Friday, the private weather firm said.

 

The eastern Midwest and Delta should turn colder again during the next couple of days, but temperatures probably won't dip as low as they did during the weekend, Meteorlogix said.