February 7, 2007

 

US Wheat Review on Tuesday: Down on speculative, technical sales, weak corn

 

 

U.S. wheat futures finished moderately lower Tuesday, declining to levels not seen in almost a month in Chicago in active trading on the close.

 

Speculative and technical selling and spillover from weaker corn values pressured prices, sources said.

 

CBOT March wheat declined 7 1/2 cents to US$4.51, KCBT March wheat fell 8 3/4 cents to US$4.76 1/2, and MGE March wheat settled 6 3/4 cents lower at US$4.85 1/2.

 

Corn futures were weaker and wheat followed corn for much of the session, said Vic Lespinasse of AG Edwards & Sons.

 

Technical selling added pressure near the close as sell orders above US$4.50 in March were touched off, sources added.

 

The market is telling people not to worry about the potential for winterkill in the U.S. soft red wheat belt despite the recent weather, Lespinasse said.

 

In addition, weather forecasts are calling for additional moisture in the soft red growing area, which would help add snow cover, he said.

 

News that India trimmed its 2006-07 wheat production estimate had little impact, a floor trader said.

 

India said Tuesday that it forecast 2006-07 wheat production at 72.5 million metric tonnes, lower than the 74 million forecast earlier but above last year's 69.5 million tonnes.

 

The Indian wheat news is potentially bullish but the market doesn't seem to be concerned, the floor trader added.

 

On daily open auction charts, March wheat settled below its major moving averages and at its lowest level since Jan. 10. The 14-day relative strength index in CBOT March stands at 39.95

 

In CBOT trades, Goldenberg-Hehmeyer bought 600 March and Fimat sold 700 March.

 

 

Kansas City Board of Trade

 

Hard red wheat futures settled moderately lower, following the weakness in CBOT wheat with technical selling near the close adding to the losses, a KCBT floor source said.

 

Hard red wheat followed CBOT wheat lower, and it was a technically based trading day with nothing fundamental except the India news to support the market, he added.

 

On daily open auction technical charts, KCBT March settled below its major moving averages and at its lowest level since Jan. 10.

 

In KCBT trades, JP Morgan sold 1,000 May, Prudential bought 500 March and Fimat sold 600 March.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower in quiet trade, with the market following CBOT wheat lower on the break in corn prices, a floor source said. A significant portion of the day's activity was spread trading with Harvest States buying 500 March-May and some buying of MGE December wheat and selling CBOT December wheat, they added.