February 6, 2007

 

US Wheat Review on Monday: Ends lower on few inputs; buyers absent

 

 

U.S. wheat futures settled modestly lower Monday in light trade as a lack of fresh inputs and absence of spillover buying weighed on prices, sources aaid. Wheat ended lower despite nearby soybean futures making new life-of-contract highs for the second day in a row, they added.

 

CBOT March wheat fell 2 3/4 cents to US$4.58 1/2, KCBT March wheat fell 1 3/4 cents to US$4.85 1/4, and MGE March wheat settled 1 1/4 cents lower to US$4.92 1/4.

 

"Wheat is having a hard time sustaining any rallies," said John Kleist, senior analyst at Top Third Ag Marketing in Chicago. Wheat continues to suffer from a lack of export demand with Egypt buying Russian wheat over the weekend, he said.

 

Moisture conditions remain favorable for the soft red and hard red winter wheat crops in the U.S., and there has been no obvious effect on the crop from the cold weather in the U.S., he noted.

 

Wheat recovered from losses set earlier in the session but couldn't generate any buying interest, and the market retreated to session lows late on speculative selling, a floor source said.

 

There doesn't appear to be much fund support for wheat right here, a floor trader said.

 

Commodity fund buying and selling was even on the day.

 

Without any fresh inputs wheat could see continuing attempts to take out the recent lows, the trader added. CBOT March wheat's recent low is US$4.47 1/2, set in January.

 

The USDA reported that weekly wheat exports were 23.0 million bushels, near the upper end of analyst estimates. For the 2006-07 marketing year, wheat inspected for export is running 17.3% behind versus last year.

 

On daily open auction charts, March wheat settled right at its 200-day moving average.

 

In CBOT trades, Man Financial bought 500 May and 300 March, and FC Stonnee bought 200 March.

 

 

Kansas City Board of Trade

 

Hard red wheat futures finished with light losses in extremely quiet trade, a KCBT floor source said.

 

The market moved higher at the start as firm prices overnight and stronger soybean futures helped supply support, they said. However, the lack of any additional buying interest helped erase the gains and prices set back, the source added.

 

Light inter-market spread trading was noted with people buying MGE spring wheat and selling KCBT hard red winter wheat.

 

On daily open auction technical charts, KCBT March settled beneath its major moving averages.

 

In mid-day KCBT trades, Fimat bought 100 March, and Frontier sold 100 March.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower despite early strength on follow-through buying and stronger soybean values, sources said. The lack of further buying pressed the market lower before staging a modest recovery based on firming CBOT corn prices, an MGE floor source said. Corn was unable to sustain its gains and spring wheat futures fell below Friday's settlement prices. Overall trading was quiet, the source added.

 

In MGE trades, UBS bought 200 December and ADM was sold 200 December.