February 2, 2007

 

US Wheat Outlook: Called steady on lack of fresh inputs

 

 

U.S. wheat futures are expected to begin Friday's day session trading at steady levels as a quiet overnight session and a lack of fresh news is expected to limit price volatility, trade sources said.

 

In overnight electronic trading, CBOT March wheat slipped 1/4 cent to US$4.60, while March KCBT hard red wheat fell 1 1/2 cents to US$4.86.

 

Wheat should see a steady, two-sided trade at the start and then take its cues from the other grain, particularly corn, a floor broker said. There is little fresh news out to influence price direction either way, he noted.

 

Wheat could also draw some support from the outside markets; crude oil is higher, but metals are weaker, he added.

 

Corn is still the leader in general and if corn can work its way higher then wheat should find support, an analyst said. However if corn is on the defensive wheat will have a hard time trading higher, he added.

 

On daily technical charts, CBOT March wheat traded a bearish "outside day" down and bulls are in some technical trouble, a market technician said. The next downside price objective is to close prices below solid chart support at US$4.47 1/2 per bushel, the technician said. The bulls next upside objective is closing prices above resistance at US$4.86 1/2.

 

First resistance is seen at US$4.65 and then at US$4.70. First support is seen at Thursday's low of US$4.59 1/2 and then at this week's low of US$4.53 1/2.

 

March KCBT wheat closed nearer the session low Thursday and are in a three-month-old downtrend on the daily bar chart, the technician said.

 

He sees first resistance for KCBT March at US$4.90, and then at US$4.94 1/2. First support is seen at US$4.84 and then at US$4.82.

 

In the U.S. Midwest soft red wheat growing area temperatures are forecast well below normal through Tuesday, DTN Meteorologix Weather said. Low temperatures in the period between should range between -5 and -15 degrees Fahrenheit. Dry conditions with only a few light snow showers are expected in the period. Meteorologix added.

 

In the U.S. hard red winter wheat belt, dry conditions with only a chance for light precipitation is expected on Sunday and Monday. Temperatures are expected below normal Sunday and Monday and near to above normal west and below normal east on Tuesday, DTN Meteorologix Weather said.

 

In other wheat news, the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders data for the period ending Jan. 30 Friday afternoon.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EST (1800 GMT).