US Wheat Outlook on Monday: 1-2 cents lower start seen on lack of inputs

 

 

U.S. wheat futures are predicted to begin Monday's day session trading 1-to-2 cents lower as the lack of fresh news and a quiet overnight session are expected to limit activity, sources said.

 

In overnight electronic trading, CBOT March wheat slipped 1 1/2 cents to US$4.62, while March KCBT hard red wheat fell 1/2 cent to US$4.87 1/2.

 

The lack of news should limit trading, a commission house analyst said. Egypt bought U.S. and Russian wheat over the weekend but it had little impact on the markets overnight, he said.

 

Egypt purchased 205,000 metric tonnes of wheat, with 120,000 tonnes U.S. soft red wheat and the balance Russian wheat, the country's General Authority for Supply Commodities, or GASC said.

 

Trading should be choppy and two-sided, a floor analyst said. Technically the nearby months have been weak and the commitment of traders report had little fresh information, the analyst added.

 

Large non-commercial traders increased their long CBOT wheat futures and options on futures positions by 4,059 contracts and cut their short holdings by 1,455 contracts and are now overall net short 8,469 futures and options on futures, down 5,510 contracts, the Commodity Futures Trading Commission reported Friday. Large commercial traders added 3,450 contracts to their short holdings and trimmed their long positions by 1,334 contracts and are now net short 152,988 contracts as of Jan. 23, the CFTC said.

 

At the KCBT, large non-commercial traders added 2,106 contracts to their long positions, while cutting their short positions by 50 contracts and are now net long 23,977 contracts. Large index fund traders increased their long positions by 109 contracts and increased their short positions by 38 contracts and are now net long 26,467 futures and options on futures contracts.

 

On daily technical charts, CBOT March wheat closed at the weekly low Friday and this gives the bears some fresh downside technical momentum, a technical analyst said. Wheat remains in a three-month old downtrend on the daily bar charts, he added.

 

First resistance is seen at Friday's high of US$4.70 and then at US$4.74. First support is pegged at last week's low of US$4.61 and then at US$4.60.

 

March KCBT wheat closed near the session low Friday and trading has become choppy, the analyst said.

 

First resistance for KCBT March is seen at US$4.92, Friday's high and then at US$4.95. First support is seen at US$4.86 and then at last week's low of US$4.83 1/2.

 

In the U.S. soft red wheat growing region there is a chance for snow showers through Wednesday, said DTN Meteorologix Weather. Temperatures are expected to average below to well below normal in the period.

 

In the U.S. hard red winter wheat belt, mainly dry conditions are expected through Tuesday with light precipitation possible in the southern sections of the region on Wednesday. Temperatures are forecast below normal Tuesday and Wednesday, Meteorologix Weather said.

 

In other wheat news, Jordan is tendering for 100,000 metric tonnes of wheat from any origin, the Ministry of Trade said Monday.

 

Australia's 2007 wheat output could top 26 million metric tonnes if seasonal conditions return, an Australian crop forecaster said Saturday.

 

The Philippines plans to tender for 20,000 metric tonnes of feed wheat Feb. 1, an official of the Philippine Association of Feed Millers said.

 

Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 EST (1700 GMT).