February 9, 2007

 

US Wheat Review on Thursday: Settle higher on corn spillover, export sales

 

 

U.S. wheat futures finished higher Thursday, benefiting from spillover buying from corn futures and better-than-expected weekly export sales, sources said.

 

Chicago Board of Trade March wheat settled 5 cents higher at US$4.57, Kansas City Board of Trade March wheat gained 7 1/4 cents to US$4.83 3/4, and Minneapolis Grain Exchange March wheat ended 7 3/4 cents higher at US$4.94.

 

Corn rallied and wheat followed, a CBOT floor analyst said. In addition, there was some position squaring ahead of Friday's U.S. Department of Agriculture's supply and demand reports and there wasn't much interest in selling wheat Thursday, the analyst 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.

 

The USDA is scheduled to release its February supply-demand report Friday at 8:30 a.m. EST (1330 GMT).

 

Wheat was supported by another good week of export sales, said Bill Nelson, associate vice-president at AG Edwards & Sons in St. Louis. The week ending Feb. 1 had the third highest sales total of the marketing year, with export sales increasing in the last several weeks.

 

The USDA reported that weekly wheat export sales totaled 842,600 metric tonnes for the week ending Feb. 1, above the 400,000-650,000 tonnes expected by analysts.

 

Nelson said that perhaps importers are possibly beginning to turn to the U.S. for wheat supplies.

 

Spread trading with the rolling out of nearby March and into May continues to be a feature, a floor trader said.

 

Wheat's price direction Friday will be determined by what the USDA reports for wheat as well as corn, Nelson said.

 

On daily open auction charts, March wheat finished below its major moving averages and remained near the low end of its recent trading range.

 

In CBOT trades, ADM sold 1,000 July, the USA Trading Division of Refco bought 500 March, and UBS sold 300 December.

 

 

Kansas City Board of Trade

 

Hard red wheat futures ended higher, following the lead of corn with "book squaring" ahead of the report also adding to the gains, a KCBT floor trader said. Light speculative buying interest pushed the market up as well, he added.

 

On daily open auction technical charts, KCBT March settled above its 10-day moving average.

 

In mid-day KCBT trades, ADM Investor Services bought 100 March, Frontier Futures bought 150 July and General Mills sold 150 July.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled higher in thin trading, with the market rallying ahead of the USDA reports, led by corn, an MGE floor broker said. Spread trading remained a feature with commercials buying the March-May and speculative longs selling the spread, the broker added. Cash movement remains light, sources added.

 

On daily open auction charts, March spring wheat finished above its 10-day and 200-day moving averages but below its 20-day moving average.