March 2, 2007

 

US Wheat Review on Thursday: Finishes lower, but trims losses late

 

 

U.S. wheat futures settled lower Thursday but well above levels reached earlier in the session as light short covering and technical buying trimmed the declines in late activity, a commission house analyst said.

 

CBOT May wheat dropped 9 cents to US$4.79, KCBT May wheat fell 10 1/4 cents to US$5.05 1/4, and MGE May wheat settled 6 1/2 cents lower at US$5.13 1/2.

 

Wheat was under pressure from the opening bell as speculative fund liquidation and technical selling helped push prices lower, the analyst added.

 

Fund selling was estimated at 5.000 contracts.

 

Spillover weakness from steep losses in corn and soybeans added to the lack of buying interest, a floor CBOT floor trader said.

 

Wheat declined on the speculative liquidation and the losses in corn and soybeans but held that spike bottom that it established on Tuesday, which brought in some short covering, said Louise Gartner, an analyst at Spectrum Commodities in Beaver Creek, Ohio.

 

There was little fresh fundamental news out, and there was not much in the weekly export sales report for wheat to "hang its hat on," she added.

 

The U.S. Department of Agriculture reported that weekly wheat export sales were 321,700 metric tonnes for the week ended Feb. 22, within the 250,000-450,000 tonnes expected by analysts.

 

If corn can find some strength, wheat might want to try and fill the downside gap created between Monday and Tuesday's session on Friday, Gartner said.

 

On daily open auction technical charts, CBOT May settled just above its 20-day and 40-day moving averages.

 

In CBOT trades, JP Morgan bought 1,200 May, and sold 500 May, Citigroup sold 1,800 May and Iowa Grain sold 800 May.

 

 

Kansas City Board of Trade

 

Hard red winter futures finished with moderate losses, mid-range between the high and the low of the session, floor traders said.

 

Speculative selling and spillover weakness from CBOT grains kept wheat on the defensive, the traders said.

 

Fund selling was estimated at 2,000 contracts.

 

Late short covering in step with soft red wheat at the CBOT helped trim the declines, a commission house analyst said.

 

In KCBT trades, Fimat sold 700 May, and Man bought 1,000 July and sold 300 May.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower as spillover selling pressured prices, an MGE floor broker said. Trading was very quiet as a major snowstorm in the region helped dampen country movement of wheat, the broker added.

 

Light commercial-related buying was noted near the lows of the session.