February 22, 2008

 

US Wheat Review on Thursday: Higher; technical, end user buying supports

 

 

U.S. wheat futures ended higher Thursday, rebounding from recent losses on technical and end user buying.

 

May CBOT wheat ended 12 cents higher at US$10.45 1/2, May KCBT wheat settled 11 3/4 cents higher at US$10.86 3/4, and May MGE wheat finished 28 1/4 cents higher at US$15.58 1/4.

 

On tap for Friday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST. Trade estimates put wheat export sales at 250,000 to 600,000 metric tonnes.

 

The market's recent blow off correction from previous highs has seemingly run its course, allowing futures to stabilize and find fresh buying interest, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

Commercial buying helped solidify the gains, with positioning ahead of Friday's option expiration and next week's first notice day for March futures opening the door for prices to bounce back from prior losses, Hoops added.

 

Technical buying was featured as well, with traders saying the recent declines were a little overdone and the path of least resistance was higher, particularly in light volume action, analysts said.

 

Meanwhile, talk of Iraq possibly looking for wheat supplies added mild support to keep sellers on the run, particularly with end user buying emerging during the day, a CBOT broker said.

 

In other news, U.S. wheat planted area is expected to climb to 64 million acres in 2008, U.S. Department of Agriculture Chief Economist Joseph Glauber said Thursday at the annual Agricultural Outlook Forum. The 2008-09 acreage estimate is up from a year ago, but below the USDA's baseline projection of 65 million acres released Feb. 12.

 

On tap for Friday, the USDA is scheduled to release its weekly export sales report at 8:30 a.m. EST. Trade estimates put soybean export sales at 250,000 to 600,000 metric tonnes.

 

In CBOT pit trades, buyers and sellers were scattered among various commission houses, with speculative funds net buyers on the day.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended higher, quietly rising in step with the rest of the wheat complex. Overall activity was subdued, with traders taking the opportunity to square a few positions ahead of Friday's expiration of options on March futures, a KCBT floor trader said. Speculative funds were net buyers on the day, with traders saying the USDA's acreage projections had little impact despite coming in below their previous baseline projections, he added.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended higher, with nearby contracts gaining against the back months on general bull spreading, floor traders said. Overall activity was light, with advances accelerated by a lack of selling as traders settle into a waiting mode amid the absence of fresh news, traders said.

 

The market is at a point where we won't have any clues into U.S. production for a while with the winter crop still in dormancy, so the rolling of positions and intermarket jockeying will be featured, a MGE floor added.