February 14, 2007

 

US Wheat Outlook on Wednesday: 1-2 cents higher on follow through, steady corn

 

 

U.S. wheat futures are expected to start 1-to-2 cents higher Wednesday, underpinned by Tuesday's firm close and expected strength in CBOT corn futures in the absence of fresh inputs, sources said.

 

In overnight electronic trading, CBOT March wheat gained 1 1/4 cents to US$4.60 1/4, while March KCBT hard red wheat rose 1 cent to US$4.88 1/2.

 

Wheat should be supported by spillover from Tuesday's firm close and will follow the lead of corn futures which were stronger Tuesday and again in overnight trade, a commission house analyst said.

 

There was little fresh news out overnight but the U.S. Department of Agriculture is scheduled to release its 10-year baseline projection at 12:00 p.m. EST (1800 GMT). This should be supportive to corn with wheat in the role of a follower, a floor source said. Historically, this is the quiet time of the year for wheat so it will look toward other markets for price direction, he added.

 

In the U.S. Midwest soft red winter wheat belt, mainly dry conditions are expected Thursday in the west with the light snow possible Friday, while mainly dry conditions seen in the eastern half of the region, DTN Meteorologix Weather said. Temperatures expected to average below to well below normal in the period.

 

In the U.S. hard red winter wheat belt, mainly dry weather is predicted for Thursday and Friday, with temperatures expected to average below normal Thursday and above normal in the west and near normal in the eastern half of the region on Friday, Meteorologix Weather said.

 

On daily open auction technical charts, CBOT March wheat closed near the session high Tuesday and the bulls' next upside price objective is closing prices above solid resistance at US$4.70 per bushel, a technical analyst said.

 

First resistance for CBOT March is seen at US$4.61 and then at US$4.65. First support is pegged at US$4.54, this week's low and then at US$4.49.

 

March KCBT wheat prices closed near the session high and bulls and bears are back on a level technical near-term playing field, the analyst said. The bulls' next upside price objective is closing prices above solid chart resistance at US$4.95 per bushel.

 

First resistance for KCBT March is seen at US$4.88 and then at US$4.92. First support is seen at US$4.81 1/2 and then at US$4.74 1/2.

 

In other wheat news, France will export less soft wheat in 2006-07 to non-E.U. countries than earlier forecast, according to the French state grains board, ONIGC.

 

Non-E.U. soft wheat exports are expected to decline by 200,000 metric tonnes to 6.1 million tonnes as French wheat prices have not fallen as much as wheat prices in the U.S., ONIGC's managing director said.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended Feb. 8 at 8:30 a.m. EST (1330 GMT).