January 30, 2006

 

US Wheat Outlook on Monday: Up 2-4 cents on higher CBOT soy calls

 

 

U.S. wheat futures were called to open up 2-4 cents Monday following firm overnight trade and calls for a 12-15 cent higher open in Chicago Board of Trade soybean futures on technical buying and hot, dry weather in Argentina's soy growing region, brokers said.

 

News that Iraq expected to open bids for 1 million tonnes of optional origin wheat on Wednesday, for a tender that was supposed to have closed Saturday, wasn't expected to offset the support in wheat from the higher soybean opening calls, said Terry Reilly, a grain analyst at Citigroup.

 

U.S. wheat traders had expected that results of the tender could take up to a couple weeks to be released. Many analysts were expecting the U.S. to garner a significant share, with support seen mainly in Kansas City Board of Trade hard red winter wheat futures.

 

In the overnight e-CBOT session, most-active March wheat at the Chicago Board of Trade closed up 3 1/4 cents at $3.46 3/4 per bushel.

 

First resistance was seen at $3.47 and then at $3.50. First support was put at $3.41 1/2 - Friday's low - and then at $3.35 1/2, a technical trader said.

 

The CFTC reported Friday that speculators in CBOT wheat futures for the week ended January 24 increased short holdings by 4,392 lots to hold 81,635 short positions and increased their long holdings by 683 lots to hold 54,558 long positions.

 

For CBOT wheat futures and options combined, speculators were short 75,994 lots, up 3,231 contracts from the week before, and long 55,159 contracts, up 276 lots from the previous week.

 

For KCBT wheat futures only, speculators for the week ended Jan. 24 cut their net long stance. They decreased their long holdings by 534 lots to hold 45,125 long positions and increased their short holdings by 258 lots to hold 5,343 short positions.

 

For KCBT wheat futures and options combined, speculators were long 44,467 lots, down 333 contracts, and short 3,128 contracts, up 262 lots from the previous week.

 

For MGE spring wheat futures only, speculators for the week ended Jan. 24 cut their net long position, cutting long holdings by 382 lots to 10,925 lots and increasing short holdings by 27 lots to 948 lots.

 

For MGE spring wheat futures and options combined, speculators also cut their net long position, decreasing long holdings by 359 lots to 10,604 contracts and increasing short holdings by 33 lots to 972 contracts.

 

Cash U.S. hard red winter wheat basis bids were steady to weak Monday; soft red winter wheat basis bids were steady to weak; and spring wheat basis bids were mixed, grain merchandisers said.

 

Showers of 0.10 to 0.40 inch fell during the weekend over the eastern part of the U.S. Southern Plains, while dry conditions were expected until Friday, according to Meteorlogix weather service.

 

In global wheat news, Syria sold 100,000 tonnes of soft wheat to Jordan.

 

India said that wheat plantings covered 26.5 million hectares in the Nov. 1-Jan. 30 period, compared with 26.1 million hectares in the year-earlier period, the Ministry of Agriculture said Monday.

 

The government has forecast wheat output of 75.5 million tonnes in the current crop year to June.

 

U.S. wheat traders also continued to eye reports from Russia and Ukraine as that key wheat-growing region experiences extremely cold temperatures this year.