February 8, 2007

 

US Wheat Review on Wednesday: Ends flat-slightly higher; corn weighs

 

 

U.S. wheat futures settled unchanged to slightly higher in two-sided activity Wednesday as spillover weakness from sliding corn futures late in the session weighed on wheat, sources said.

 

CBOT March wheat settled 1 cent higher at US$4.52, KCBT March wheat ended unchanged at US$4.76 1/2, and MGE March wheat ended 3/4 cent higher at US$4.86 1/4.

 

"Wheat did not get any help from corn," a CBOT floor broker said.

 

Late in the session, March corn traded down to its lowest level since December.

 

"It was a quiet day," said Jason Britt, an analyst with Central States Commodities in Kansas City. Nearby CBOT wheat futures are trading near good support at US$4.50 per bushel, but the market had nothing to help push it higher, Britt said.

 

Wheat futures were stuck between weaker corn values and the firm tonnee in soybeans, a commission house analyst said. March soybeans set another new life-of-contract higher early in the session but were unable to maintain most of those gains, he said.

 

Position-squaring after recent price weakness and ahead of Friday's U.S. Department of Agriculture reports helped to limit the losses, sources added.

 

U.S. wheat ending stocks for the 2006-07 marketing year are seen at 474 million bushels, according to a survey of 12 analysts conducted by Dow Jones Newswires. This is nearly unchanged with the 472 million bushels the USDA estimated in January.

 

At these price levels wheat should begin to see exports pick up, Britt said.

 

Overnight, Egypt bought 270,000 metric tonnes of wheat, with the U.S. supplying 85,000 tonnes of soft red winter wheat with Russian and Kazakh wheat making up the rest of the tender.

 

The market should see some squaring up of positions ahead of the USDA reports but without a lot of volatility, a floor trader said.

 

On daily open auction charts, March wheat settled below its major moving averages.

 

In CBOT trades, Tenco bought 500 March, Bunge sold 400 March and 300 December and JP Morgan sold 1,000 March.

 

 

Kansas City Board of Trade

 

Hard red wheat futures finished unchanged in "a 4-cent sideways trading pattern," a floor source said.

 

Hard red wheat continues to take its cues from corn, but the rolling out of March positions into May was a major focus of the trade, with flat price trading "anemic," the source said.

 

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

 

In KCBT trades, JP Morgan sold 500 March and bought 500 May as part of the roll out of March into May positions, sources added.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended slightly higher in choppy trade as it "appears that spring wheat is well supported at US$4.85 per bushel, a floor source says. Spread trading was a feature of the trade and is increasing as March approaches, the source added. Prudential sold 500 March-May and UBS was on both sides of the spread, floor sources added.

 

Thursday, the USDA is scheduled to release the weekly export sales report for the period ending Feb. 1 at 8:30 a.m. EST (1330 GMT). Analysts expect sales between 400,000 and 650,000 metric tonnes.