February 21, 2007

 

US Wheat Outlook on Wednesday: Flat to 1 cent higher following overnight trade

 

 

U.S. wheat futures are expected to begin Wednesday's day session flat-to-1 cent higher, following the tone established in overnight trade as the market searches for direction in the absence of fresh news, floor sources said.

 

In overnight electronic trading, CBOT March wheat rose 1 1/4 cents to US$4.65 3/4 per bushel, while March KCBT hard red wheat fell 1 cent to US$4.92.

 

It should be a choppy, two-sided session, a commission house analyst said. The lack of fresh inputs should keep prices in a narrow trading range and wheat should follow the other grain markets, he added.

 

The dollar is firm and energy is weaker so the outside markets' impact is negative which could weigh on market sentiment, a floor analyst said. There are holidays in Asia limiting interest, but wheat could follow the direction of corn, the trader added.

 

In the U.S. Midwest soft red winter wheat belt, mainly dry conditions are expected through Friday with only a few light snow or rain showers possible in eastern sections of the region, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal west and above normal east.

 

In the U.S. hard red winter wheat belt, mainly dry weather is forecast through Friday with showers possibly developing later Friday, Meteorologix Weather said. Temperatures are expected to average above-to-well-above normal.

 

On daily open auction technical charts, CBOT May wheat settled nearer the session low on a corrective pullback from Friday's gains and bears and bulls are on a level near-term playing field, a technical analyst said.

 

First resistance for CBOT May is seen at US$4.83, Tuesday's high and then at US$4.85. First support is at US$4.76 1/2, and then at US$4.75.

 

May KCBT closed mid-range on profit-taking pressure, the analyst said. The bulls' next upside price objective is closing prices above resistance at US$5.10 per bushel while the bears' next downside objective is closing prices below solid support at US$4.90.

 

First resistance for KCBT May is seen at US$5.05 and then at US$5.08. First support is seen at US$5.01 and then at US$4.98.

 

In other wheat news, India will resume wheat exports this year if weather conditions are favorable and output is high, India's Agriculture Minister said Wednesday. If production exceeds 72.5 million metric tonnes, he would allow exports, the minister said at an agriculture conference.