February 18, 2006

 

US Wheat Review on Friday: Strong gains on funds, technicals,weather

 

 

U.S. wheat futures finished higher Friday, led by fund and speculative buying with new contract highs set in most new crop contracts at all three exchanges.

 

The funds helped push the market higher, hit some stops and pushed it above the old highs, a floor trader said. The weather situation in the Plains brought speculative buying interest in ahead of the long weekend and pushed some premium into the market, he added.

 

Interest from the funds has got the market on the run right now, a cash- connected trader said. Nothing has changed in regard to soft red winter wheat fundamentals, he added.

 

News from Friday's U.S. Department of Agriculture Forum that 2006-07 U.S. wheat plantings would increase by 800,000 acres to 58.8 from 58.0 from 2005 had little impact on futures, sources said.

 

CBOT March wheat settled 9 cents higher at US$3.68 per bushel. May wheat rose 9 1/2 cents to US$3.79 1/2, and July gained 10 cents to US$3.89 3/4.

 

New contract highs were set in July, September and December.

 

In CBOT trades, Fimat bought 500 May, Goldenberg-Hehmeyer bought 700 March, Citigroup bought 300 May, Man Financial bought 300 May and O'Connor bought 400 December, 300 July and 100 May.

 

Fimat sold 400 May, Cargill sold 300 December, Man Financial sold 400 May, and Rand sold 300 May.

 

Commodity fund buying was estimated at 4,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT March rose 9 3/4 cents to US$4.35 1/4, May jumped 10 cents to US$4.39 1/2, and July settled 11 1/2 cents higher to US$4.37.

 

New contract highs were set in July, September and December.

 

Speculative buying led the way higher, a KCBT source said. Fund buying was also a key to the gains, but speculators were the driver as people are concerned about the cold weather and its potential impact on the hard red crop, he added.

 

Temperatures Friday morning were minus 4 to 6 Fahrenheit in parts of Nebraska and in the low single digits in some areas of Kansas, said Joel Burgio of DTN Meteorlogix weather.

 

Friday night will bring the coldest weather to the region, he said, with temperatures predicted to range as low as 0 to minus 10 F in Nebraska, northwest Kansas and parts of Colorado.

 

Lows of 5 degrees to minus 2 F are possible in southeast Colorado and central and southwest Kansas, Burgio said.

 

ABN Amro bought 700 July, Man Financial bought 500 May, and ADM bought 500 March. Fimat sold 1,000 March, and Prudential Financial sold 500 December.

 

 

Minneapolis Grain Exchange

 

MGE March settled 7 1/4 cents higher at US$4.16, and May gained 7 cents to US$4.22.

 

The March and May contracts tied their contract highs, with July, September and December all making new contract highs Friday.

 

Minneapolis rail receipts of wheat on Friday totaled 33 cars versus last year's 232 cars. Durum receipts totaled 12 cars versus last year's 52 cars.

 

On Monday, the CBOT, KCBT and MGE are closed for the Presidents Day holiday.