March 6, 2007

 

US Wheat Review on Monday: Rebounds to end higher on position squaring

 

 

U.S. wheat futures settled higher Monday, shrugging off early weakness based on lower prices in overnight trade and weak Asian equity markets, floor traders said.

 

CBOT May wheat gained 7 cents to US$4.80 3/4, KCBT May wheat rose 4 cents to US$5.08, and MGE May wheat settled 3 cents higher at US$5.15 1/2.

 

Wheat began the day to the downside but began to recover technically when May fell below support at US$4.68 but could not uncover any additional selling, a commission house analyst said.

 

The lack of a U.S. equity market sell off also brought some stability to the grain trade, the analyst added.

 

Technically the market was oversold and when the market couldn't move past the lows of the session, it appeared that downside potential was limited, encouraging people to cover their positions, a floor trader said.

 

Fundamental news was lacking with the U.S. Department of Agriculture's export inspections report termed "disappointing," by a floor analyst.

 

The USDA reported wheat inspections totaled 18.4 million bushels for the week ended Mar. 1, below the 19-24 million forecast by analysts and the 23.3 million inspected last week.

 

On daily open auction technical charts, CBOT May ended above its' 20-day and 40-day moving averages, but remained below its' 10-day and 50-day moving averages.

 

In CBOT trades, Citigroup bought 1,000 May late, Penson GHCO bought 400 December, Fimat bought 300 May and 300 July and Man Financial sold 200 May.

 

 

Kansas City Board of Trade

 

Hard red winter futures settled higher and near session highs, following CBOT wheat futures in very quiet activity, a KCBT floor trader said. The market had moved lower earlier in the session before staging a late recovery based on the rally at the CBOT, the trader added.

 

In KCBT trades, JP Morgan sold 200 July, Country Hedging sold 200 July and Man Financial sold 200 July.

 

On open auction technical charts, May traded an outside day, with a high and low above the range established in Friday's trade. May finished above its major moving averages with the exception of its' 10-day and 100-day moving averages.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended higher and at session highs in very quiet trading with commercial buying near the close helping the market finish firm, a floor broker said. Spring wheat took support from the gains in CBOT wheat, though there was some light MGE-CBOT spreading in December earlier in the day, the broker said.

 

On daily open auction technical charts, May wheat finished above most of its major moving averages.