January 27, 2007

 

US Wheat Review on Friday: Ends down on light speculative, fund selling

 

 

U.S. wheat futures settled lower Friday as the lack of fresh inputs and light speculative selling weighed on prices for most of the session with weaker corn values also limiting the upside, sources said.

 

CBOT March wheat fell 5 1/4 cents to US$4.63 1/2, KCBT March wheat declined 6 cents to US$4.88, and MGE March wheat lost 3 1/2 cents to US$4.93 1/2.

 

Trading was modest Friday with a floor trader noting that the volume was "probably the lightest of the week."

 

"Corn is the leader," said Louise Gartner, an analyst with Spectrum Commodities in Beaver Creek, Ohio. Trading was quiet and wheat continues to take its cues from corn, she added.

 

Technically wheat remains within its recent trading range on daily technical charts and is holding above a gap created earlier, but "something has got to give," she added.

 

On daily open-auction technical charts March wheat futures traded an inside day at all three exchanges, trading near the bottom of their recent ranges.

 

Light fund selling early in the day kept the market weak in Chicago with not much interest in buying it, a commission house analyst said.

 

Corn recovered late in the session, and that helped to trim some of the losses but additional fund selling in CBOT March late pushed the market back toward its lows, the commission house analyst added.

 

Unless demand picks up, wheat is going to continue to struggle, Gartner added.

 

On daily technical charts, March wheat traded an inside day, with the highs and the lows within the range established on Thursday. For the third session in a row, March settled beneath its 10-day moving average.

 

In the 6-to-10 day forecast for the U.S. soft red winter wheat belt temperatures are expected to average below to well below normal and precipitation should average near to below normal, said DTN Meteorologix Weather.

 

In CBOT trades, JP Morgan sold 400 May, Fortis sold 600 July and 600 December and UBS sold 700 December.

 

Commodity fund selling was estimated at 3,000 contracts.

 

 

Kansas City Board of Trade

 

Hard red wheat futures settled lower, making new lows ahead of the close on speculative selling before pre-weekend short covering helped trim the losses, a floor source said. There was nothing new to trade on Friday, they added.

 

The market saw a correction after Thursday¡¯s gains, another source noted.

 

On daily technical charts, KCBT March settled below both its 10-day and 20-day moving averages.

 

In the hard red winter wheat belt, 6-to-10-day-outlook temperatures are expected to average below normal, with precipitation near-to-below normal north and central areas, and near-to-above normal south, DTN Meteorologix Weather said.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled lower, falling in step with CBOT wheat with the losses limited by scale-down buying in the nearby months, floor sources say. Recent interest in deferred-month contracts continues with light buying interest in December, they added.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Jan. 23.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11 a.m. EST (1700 GMT). In the current marketing year, 537.9 million bushels of wheat have been inspected compared to 652.4 million the previous year.