February 16, 2006

 

US Wheat Review on Wednesday: Higher on soy rebound, technical buying

 

 

U.S. wheat futures settled higher Wednesday, finishing higher for the first time in four trading sessions. Futures rallied from modest losses set earlier in the day as a recovery in soybean futures from double digit declines provided support for wheat futures, sources said. Light technical buying also added to the upside, sources added.

 

CBOT March wheat rose 4 3/4 cents to US$3.52 per bushel. May wheat also gained 4 3/4 cents to US$3.63 1/4. KCBT March settled 3 1/2 cents higher to US$4.16 1/2, with KCBT May 1 3/4 cents higher at US$4.19 3/4. MGE March wheat rose 5 3/4 cents to US$4.01 1/4.

 

The rally in soybeans spilled over into wheat futures, a floor trader said. Futures were lower in choppy, two-sided trade on continued consolidation and the lack of fresh inputs amid the lack of a feature, he added.

 

There was not much outright trading, but there was good volume in the May-March spread as people rolled out of their March positions and into May ahead of first notice day, a floor analyst said.

 

"The volume was all in the spreads today," he added.

 

News that Iraq had asked EU wheat traders for quotes regarding its recent tender for optional-origin wheat had little market impact, with traders noting reports that the EU would have a difficult time exporting enough hard red wheat, the type Iraq usually purchases.

 

There was no word on when the results of the tender would be announced, sources said.

 

Light precipitation is forecast over the next several days in the southern central plains, with an intense cold front moving into the region bringing temperatures as low as the single digits, DTN Meteorlogix weather said. The cold weather will be relatively short-lived, Meteorlogix added.

 

In CBOT trades, JP Morgan bought 400 May and 300 December, Prudential Financial bought 100 May, Rand Financial 200 March, and ABM Amro bought 200 May.

 

Cargill sold 100 May, Man Financial sold 200 May and Rand Financial sold 200 July.

 

In midday KCBT trades, ADM bought 900 March and 200 July, while selling 300 May. Man Financial sold 1,000 March, and FC Stonnee bought 100 December.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales for the week ended Feb. 9. Analysts expect wheat sales between 300,000-500,000 metric tonnes. Last week, sales were 354,700 tonnes.