February 13, 2007

 

US Wheat Outlook on Tuesday: 1-2 cents higher following e-CBOT activity

 

 

U.S. wheat futures are expected to start 1-to-2 cents higher Tuesday, supported by higher prices in overnight activity and position squaring after Monday's price weakness, floor sources said.

 

In overnight electronic trading, CBOT March wheat rose 1 cent to US$4.56 3/4, while March KCBT hard red wheat ended up 3/4 cent to US$4.82 1/2.

 

Wheat was weaker in Monday's trade and should see a recovery in prices, a floor analyst said. However, there is no fresh news to move wheat sharply in either direction so the trade could be choppy and two-sided as market waits on fresh inputs, he added.

 

The wheat market could also see some support from outside markets with silver and gold trading at higher levels, the analyst said.

 

Some market participants could be absent Tuesday due to a snowstorm in the Chicago area and this could dampen interest as well, a floor source said.

 

In the U.S. Midwest soft red winter wheat belt, mainly dry and windy conditions are expected Wednesday and Thursday, said DTN Meteorologix Weather, with temperatures expected to average below to well below normal in the period.

 

In the U.S. hard red winter wheat belt, light precipitation on Wednesday will be followed by dry weather Thursday, Meteorologix Weather said. Temperatures are forecast to average well below normal.

 

On daily open auction technical charts, CBOT March wheat closed near the session low Monday and the bears still have a slight technical advantage, a technical analyst said.

 

First resistance for CBOT March is seen at US$4.62 and then at US$4.65. First support is pegged at Monday's low of US$4.54 and then at last week's low of US$4.49.

 

March KCBT wheat prices also closed near the session low Monday and remain in a four-month downtrend on the daily bar chart, the analyst said.

 

First resistance for KCBT March is seen at Monday's high of US$4.85 1/2 and then at US$4.90. First support is seen at US$4.80 and then at US$4.74 1/2, last week's low.

 

In other wheat news, Japan's Ministry of Agriculture, Forestry and Fisheries is seeking 115,000 metric tonnes of wheat in a tender to be concluded Thursday, an agricultural ministry official said Tuesday.

 

Philippine wheat imports are expected to decline in the 2006-07 marketing year due to high prices but are expected to rebound in the 2007-08 marketing year as wheat prices are expected to decline, according to a U.S. Department of Agriculture attach¨¦ report posted on the Foreign Agricultural Services web site.