February 13, 2007

 

US Wheat Review on Monday: Settles lower on light speculative selling

 

 

U.S. wheat futures ended lower Monday, undermined by light speculative selling and lower outside markets in the absence of fresh buying interest, sources said.

 

Chicago Board of Trade March wheat settled 4 1/2 cents lower at US$4.55 3/4, Kansas City Board of Trade March wheat fell 3 1/4 cents to US$4.81 3/4, and Minneapolis Grain Exchange March wheat ended down 4 1/2 cents at US$4.92.

 

Monday's declines in wheat began with the weak close the market had on Friday, said Jack Scoville, an analyst with Price Futures Group in Chicago. Traders were looking at the market from the short side coming in to the session, he said.

 

In addition, new crop wheat weather remains favorable with precipitation expected in both the hard red winter and the soft red winter wheat growing areas of the U.S. over the next several days, Scoville added.

 

There wasn't much interest in buying wheat for much of the session, and energy and metals markets were lower on the day, limiting overall interest in commodities, a floor broker said.

 

Corn was weaker but wheat didn't follow corn all that much, a floor analyst said.

 

Export inspections were below estimates, also limiting interest, the analyst said.

 

The U.S. Department of Agriculture reported that wheat export inspections totaled 13.101 million bushels for the week ended Feb. 8, below the 17-23 million expected and the 23 million inspected last week

 

Wheat could be supported Tuesday as it is near an area where end users may want to buy it, a floor trader noted.

 

On daily open auction charts, March traded within the range established in last week's activity and settled below its major moving averages.

 

In CBOT trades, ADM sold 600 July, Goldenberg-Hehmeyer sold 500 March and Rand bought 200 March.

 

Commodity Fund selling was estimated at 1,000 contracts.

 

 

Kansas City Board of Trade

 

Hard red wheat futures finished lower in a very quiet session, KCBT floor sources said. Light speculative selling, weaker outside markets and moisture expected in the hard red winter wheat belt combined to limit buying interest, sources said. A floor trader said it looks like the market may not be talking about a drought this spring. There was a lack of buying interest with the rolling out of March into May the feature, he added.

 

On daily open auction technical charts, KCBT March settled below its major moving averages with its 14-day relative strength index at 44.8.

 

In KCBT trades, JP Morgan bought 1,700 May-March and 400 March-May. Man Financial bought 500 March and 500 May.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower, following the outside markets with very little flat price trading, sources said. Spread trading was the feature with traders exiting out of March positions and into May. Forecasts for warmer weather could help the basis weaken as cash market movement picks up, a floor broker said.

 

On daily open auction charts, March spring wheat settled at its 10-day moving average.