February 6, 2007

 

US Wheat Outlook on Tuesday: Mixed start seen; lack of news

 

 

U.S. wheat futures are predicted to begin Tuesday's trade slightly mixed Tuesday as the lack of fresh news and modest weakness overnight is expected to weigh on prices at the start, sources said.

 

In overnight electronic trading, CBOT March wheat fell 1 cent to US$4.57 1/2, while March KCBT hard red wheat gained 1/4 cent to US$4.85 1/2.

 

Trading was quiet overnight, and day trading should begin in a similar mode, a floor source said.

 

There isn't much news out to impact wheat either higher or lower, a commission house analyst said. Crude oil, silver and gold are all higher, which could be supportive, he added.

 

News that India's 2007 wheat crop is projected higher than last year isn't expected to be a major feature, sources said.

 

India's 2007 wheat output is forecast at 72.5 million metric tonnes, up from the 69.48 million tonnes produced the previous year, the government said Tuesday. The increase in production is projected higher due to record acres under production. This is the first government production estimate.

 

A CBOT floor trader noted that although the estimate was above last year's production, analysts had been forecasting a slightly larger number.

 

On daily technical charts, market bulls are still in technical trouble, a market technician said. First resistance for CBOT March is seen at US$4.66 and then at US$4.70. First support is seen at Friday's low of US$4.58 and then at last week's low of US$4.53 1/2.

 

March KCBT wheat closed near the session low Monday and prices are still in a three-month old downtrend on the daily bar chart, the technician said. The bulls' next upside objective is closing prices above resistance at US$5.00 per bushel.

 

He sees first resistance for KCBT March at Monday's high of US$4.91 and then at US$4.95. First support is seen at US$4.83 1/2 and then at US$4.80.

 

In the U.S. Midwest soft red wheat growing area, there is a chance for light to locally moderate snow in parts of the region Tuesday before dry weather returns on Wednesday and Thursday, DTN Meteorologix Weather said. Temperatures are forecast to average well below normal.

 

In the U.S. hard red winter wheat belt, there is a chance for a little light precipitation in the north or east Tuesday or Wednesday before dry weather returns, DTN Meteorologix said. Temperatures are forecast near to below normal Wednesday and Thursday.

In other wheat news, Japan's Ministry of Agriculture, Forestry and Fisheries is seeking to buy 160,000 tonnes of wheat in a tender to be concluded Tuesday, an agriculture official said Tuesday. The tender includes 100,000 tonnes of U.S. wheat.

 

The South Australian Farmers Federation called for a staged deregulation of export wheat marketing late Monday, the first major state farming organization to do so in that country.

 

Chile's government appealed a recent World Trade Organization ruling that would force it to dismantle its price band on wheat imports, the Agriculture Ministry said late Monday. Chile imports wheat from Argentina, its biggest wheat supplier.