February 21, 2008

 

US Wheat Outlook on Thursday: 4-6 cents higher after USDA outlook estimate

 

 

U.S. wheat futures are expected to start trading 4-to-6 cents higher Thursday, supported by the U.S. Department of Agriculture's Outlook Forum planted acreage estimate, a commission house analyst said.

 

The USDA estimated 2008-09 U.S. wheat planted acreage at 64 million acres, down from the 65.0 million acres released in its baseline projections on Feb. 11.

 

In overnight electronic trading, CBOT May wheat gained 1/2 cent to US$10.34 per bushel, KCBT May hard red wheat rose 1/4 cent to US$10.75 1/4, while MGE May wheat fell 3 cents to US$15.27.

 

The USDA's acreage number should be supportive to wheat prices, a commission house analyst said. However, there are other dynamics affecting the market and right now it's just an estimate and acreage could swing another 2-to-3 million acres in either direction before planting is completed this spring, the commission house analyst said.

 

Wheat was steady overnight and could see some support from the acreage number, an analyst said. However, ideas that recent losses are overdone and due for a correction arew expected to support the market. Beyond that there is little fresh news. Japan bought wheat but that was expected, the analyst said.

 

Japan's Ag Ministry bought 151,000 metric tonnes of wheat overnight, with 62,000 metric tonnes of semi hard and 68,000 tonnes of dark northern spring wheat purchased from the U.S.

 

On daily open auction technical charts, CBOT July wheat closed lower but nearer the session high. If MGE wheat futures continue to back off from recent levels, CBOT and KCBT wheat will likely be in trouble too, a technical analyst said. Market bulls' next upside price objective is to push and close prices above resistance at US$9.83 1/2 per bushel. The next downside price objective for bears is closing prices below solid support at US$9.34 1/2 per bushel.

 

First resistance is seen at US$9.59, Wednesday's high and then at this week's high of US$9.66. First support is seen at US$9.46 and then at US$9.40.

 

July KCBT wheat settled slightly higher and near the session high Wednesday. The next upside price objective in July is pushing prices above resistance at US$10.50 per bushel, while the bears' downside objective is pushing prices below psychological support at US$10.00.

 

First resistance is seen at US$10.30, Wednesday's high and then at this week's high of US$10.36. First support is seen at Wednesday's low of US$10.15 and then at this week's low of US$10.11.

 

U.S. weekly export sales, normally released on Thursday, are scheduled for release Friday due to the holiday.