US Wheat Review on Friday: Sinks on month-end positioning, demand

 

 

Month-end positioning pulled U.S. wheat futures down from early gains Friday, with some bearish influence seen from disappointing export demand, analysts said.

 

Chicago Board of Trade March wheat fell 10 cents to US$5.68 a bushel, down 14 3/4 cents on the week. Kansas City Board of Trade March wheat stumbled 7 cents to US$6.01, and Minneapolis Grain Exchange March wheat lost 5 3/4 cents to US$6.52.

 

Prices sank after climbing in early activity on technical and speculative buying, traders said. CBOT March wheat hit a session high of US$5.68 and closed near its session low of US$5.67.

 

Traders bought corn and sold wheat amid "disappointment" about export demand for wheat, said John Kleist, broker/analyst for Allendale. Total weekly U.S. export sales, issued Thursday, were -56,500 tonnes for wheat and 1.108 million tonnes for corn.

 

The weak export sales for wheat were seen as bearish, although cancellations by Nigeria had previously been announced, because market chatter had indicated U.S. wheat was competitive for world export business, Kleist said. Traders will keep an eye on demand next week, analysts said.

 

Traders also will watch to see whether CBOT March wheat stays above major moving averages at US$5.64 3/4 to US$5.61 1/2, Kleist said. If the contract can't hold above that level, it could retest last week's low of US$5.49, he said.

 

 

Kansas City Board of Trade

 

Profit-taking weighed on wheat after the market rose in early activity, a trader said. The contract closed well below its session high of US$6.15 and just above its session low of US$6.00.

 

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, or GASC, said it bought 60,000 tonnes of U.S. soft red winter wheat and 120,000 tonnes of French wheat in a tender. The sale of U.S wheat was small and just "token business," Kleist said.

 

GASC, in its previous tender, bought 60,000 tonnes of U.S. SRW wheat on Jan. 21, along with 60,000 tonnes of French wheat and 58,000 tonnes of Russian wheat. The markets want to see more significant U.S. sales, traders said.

 

"We continue to get one cargo out of these tenders," said Shawn McCambridge, analyst for Prudential Bache. "That really isn't an indication that we're going to see an increase in export business anytime soon."

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower after rising during the session on speculative buying, a market analyst said. End-of-the-month positioning was a primary feature of the day, he said.

 

There was not a lot of volume behind the market's strength or its pullback, the analyst said. Producers remain uninterested in selling until prices are higher, he said.