US Wheat Review on Rebound,Thursday: jumps on technical  firm CBOT soy

 

 

U.S. wheat futures climbed Wednesday on technical buying and short covering, the first gains for the markets in five day sessions.

 

Chicago Board of Trade March wheat jumped 19 1/2 cents to US$5.61 3/4 a bushel. Kansas City Board of Trade March wheat surged 20 cents to US$5.90, and Minneapolis Grain Exchange March wheat gained 18 3/4 cents to US$6.55 3/4.

 

The markets were "oversold" after recent sell-offs and felt support from some short covering, a trader said. A rally in CBOT soybeans helped pull wheat higher, he said.

 

"We've been down, down, down," the trader said. "It was certainly due."

 

It's technically supportive that CBOT March wheat closed above Wednesday's open outcry high of US$5.59, a trader said. That is "going to be a little friendly for a bounce," he said.

 

There was a lack of fresh fundamental news out for the markets, traders said. World demand remains strong, but weekly U.S. wheat export sales were nothing to get excited about, they said. Export sales of 329,800 tonnes for the week ended Jan. 29 were within trade expectations of 200,000 tonnes to 500,000 tonnes.

 

"There really wasn't anything as far as news that said, 'Hey, that's why we need to turn it around,'" a trader said.

 

There was chatter in the market about production losses in China due to a severe drought. Reports of drought have been around awhile, so it's "hard to tell how much traction you want to give that one" as far as supporting gains, a trader said.

 

 

Kansas City Board of Trade

 

KCBT wheat rose in a technical rebound from losses, a floor trader said. March wheat closed above Wednesday's open outcry high of US$5.88. Still, the market feels as though it has a weaker bias, he said.

 

"You put a temporary bottom in by closing above the previous day's high," the trader said. "We'll probably test US$6. Then you could put another 10, 20 cents on it and not really change the chart a whole much."

 

Widespread rainfall remains likely across the U.S. hard red winter wheat belt starting Sunday, T-Storm Weather said in an update to its daily forecast. The event "will be the best rain event since at least November" in the dry area, the private weather firm said.

 

 

Minneapolis Grain Exchange

 

Technical buying and surging CBOT soybeans were seen as supportive for MGE wheat, a trader said. The market was due for a recovery, he said.

 

Expectations that Congress will pass an economic recovery package seemed to help support the grains and soybeans, a trader said. "It seemed like the general attitude of the market was everybody was good with things going up today," he said.

 

In other news, Statistics Canada estimated all-wheat total stocks at 21.859 million tonnes, compared with 16.116 million tonnes the previous year. The big increase in stocks from last year wasn't surprising, a broker said.