March 5, 2010

US Wheat Outlook on Friday: Up slightly in rebound from Thursday losses

U.S. wheat futures are expected to open higher Friday in a slight bounce from Thursday's losses, traders said.

Chicago Board of Trade wheat is called 2 to 3 cents higher. In overnight trade, March wheat was up 3 cents to US$4.93 1/2 per bushel and May wheat was up 2 1/4 cents to US$5.04 1/2.

Overnight strength was mostly due to the fact losses were overdone Thursday, a trader said. Fundamentally the market has little reason to climb, thanks to abundant world supplies and anemic export sales that were highlighted by a poor weekly sales report Thursday.

"I can't see much more upside when you look at the balance sheet," said Shawn McCambridge, senior grains analyst with Prudential Bache.

A slightly weaker dollar helped support commodities overnight, although the dollar has firmed following better-than-expected U.S. payroll numbers Friday morning.

Traders are awaiting Wednesday's supply and demand report from the U.S. Department of Agriculture, although the report is seen as more of a factor in the corn and soybean markets, due to possible 2009 crop revisions.

The next downside price objective for the wheat futures bears is pushing and closing prices below solid technical support at the February low of US$4.80 3/4, the technical analyst said. The bulls' next upside price objective is to push and close March futures prices above solid technical resistance at this week's high of US$5.26 a bushel.

First resistance is seen at US$5.10 and then at Thursday's high of US$5.15 1/4, the technical analyst said. First support lies at this week's low of US$4.96 1/4 and then at US$4.92.