February 10, 2007

 

US Wheat Review on Friday: Modestly higher; late speculative sales cut gains

 

 

U.S wheat futures settled modestly higher Friday but well off the gains set earlier in the session, as speculative profit taking near the close trimmed most of the advances, sources said.

 

CBOT March wheat ended 3 1/4 cents higher at US$4.60 1/4, KCBT March hard red winter wheat rose 1 1/4 cents to US$4.85, and MGE March spring wheat ended 2 1/2 cents higher at US$4.96 1/2.

 

Wheat benefited from stronger corn and soybean futures after a neutral wheat supply and demand report was released by the U.S. Department of Agriculture on Friday morning, floor traders said.

 

Soybean futures ended higher but down from new life-of-contract highs set earlier in the session.

 

The USDA reported that 2006-07 wheat ending stocks were 472 million bushels, unchanged from last month's estimate and just below the 474-million- bushel average analyst estimate.

 

In addition, the USDA trimmed its 2006-07 world wheat carry over estimate to 120.8 million metric tonnes from the 121.8 million estimated in January.

 

Corn had a good day and wheat took some support from corn, said Louise Gartner, an analyst with Spectrum Commodities in Beaver Creek, Ohio.

 

The wheat market is beginning to respect the recent increase in export sales, with wheat possibly forming a seasonal bottom, Gartner said.

 

The market was supported by a steady bid almost all day, with fund buying estimated at 4,000 contracts, a floor trader said.

 

Near the close, however, local and speculative selling sharply reduced the gains, a cash-connected trader said.

 

Wheat looks like it may be able to break free from corn's influence somewhat over the near term and begin to focus on its own fundamentals, an analyst said.

 

On daily open auction charts, March wheat finished above its 10-day and 20-day moving averages.

 

In CBOT trades, Man Financial bought 800 March, Fimat bought 500 March and sold 700 March, and Fortis bought 400 March.

 

 

Kansas City Board of Trade

 

Hard red wheat futures ended slightly higher in very choppy trade with light technical buying helping support futures, a floor source said. No significant fund interest was noted, they added. Hard red wheat futures followed "everything from crude oil to corn Friday," a floor trader said.

 

Most of the gains evaporated as CBOT wheat futures retrenched from its earlier levels, the trader said. The USDA report had no impact on hard red wheat, a source added.

 

On daily open auction technical charts, KCBT March traded above its 40-day moving average for the first time since Dec. 4, and finished above its 10-day moving average.

 

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

 

JP Morgan was noted as a bear spreader of the March-May and Prudential was a bull spreader of the two months.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled higher in thin trading, with the market following CBOT wheat, an MGE floor source said. Export demand is beginning to pick up and that helped support prices, they added. It feels as if the market will be supported near its recent lows, the source said.

 

On daily open auction charts, March spring wheat finished above several major moving averages.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Feb. 6.

 

On Monday, the USDA is scheduled to release the weekly export inspections report for the week ending Feb. 8 at 11 a.m. EST (1700 GMT).