March 5, 2008

 

US Wheat Outlook on Wednesday: Seen mostly up on rebound, demand news

 

 

U.S. wheat futures are expected to start Wednesday's day session mostly firmer in a rebound from losses Tuesday and amid fresh demand news, traders said.

 

Chicago Board of Trade May wheat is called to open 15 to 20 cents per bushel higher. In overnight electronic trading, CBOT May wheat jumped 19 cents to US$11.06 1/2.

 

Kansas City Board of Trade May wheat overnight rose 13 cents to US$11.73. Minneapolis Grain Exchange May wheat slipped 13 cents to US$12.47.

 

Wheat is bouncing a bit after tumbling Tuesday on profit-taking and as part of a general sell-off of commodities, traders said. The neighboring CBOT corn and soy markets, along with outside markets, also are firming up after weakness Tuesday, they said.

 

There also is some wheat business being done in the world that is seen as supportive to the markets, a CBOT floor analyst said.

 

Jordan said it was tendering to buy 100,000 metric tonnes of hard wheat, of any origin, on a cost and freight basis. Half the wheat is for shipment April 10-25 and half is for shipment April 25 to May 10, an official said. The deadline for bids is March 18, he added.

 

Iraq's state grain board has issued a new tender to buy 50,000 tonnes of hard wheat from any origin, according to a news report. The bidding deadline is March 15, and bids must stay valid until March 20, the report said. No shipment times were specified.

 

Egypt's state-owned Food Industries Holding Co. is tendering to buy 40,000 metric tonnes of wheat, of any origin, for prompt delivery, an official said. The wheat will be purchased in Egyptian pounds and is for delivery on a free on truck basis.

 

In other news, new wheat export rules that take effect July 1 in Australia won't limit the number of companies that can be licensed to export or the volumes they can ship, an official said.

 

India's wheat stocks in state-run granaries as of March 1 were estimated to be around 6.55 million metric tonnes, above the April buffer requirement of 4.0 million tonnes, a senior government official said. The stocks include imported wheat lying in ports and also wheat on ships in transit to the country, he said. Wheat stocks are one of the benchmarks the government uses when considering imports of the grain.

 

CBOT wheat bulls' next upside price objective is to push and close the July future, which represents the new crop, above resistance at this week's high of US$10.60, a technical analyst said. The next downside price objective for the bears is pushing and closing prices below solid support at US$9.50.

 

First resistance is seen at US$10.30 and then at Tuesday's high of US$10.40. First support lies at Tuesday's low of US$9.80 and then at US$9.70.

 

At the KCBT, bulls' next upside price objective is pushing and closing July wheat above solid resistance at this week's high of US$11.50, the analyst said. The bears' next downside objective is pushing and closing prices below solid support at US$10.50.

 

First resistance is seen at Tuesday's high of US$11.20 and then at US$11.35. First support is seen at US$10.75 and then at Tuesday's low of US$10.67.