March 7, 2007

 

US Wheat Review on Tuesday: Settles moderately lower on local selling

 

 

U.S. wheat futures ended moderately lower Tuesday, dragged down by local selling in the absence of fresh news, analysts said.

 

CBOT May wheat fell 7 3/4 cents to US$4.73, KCBT May wheat declined 6 3/4 cents to US$5.01 1/4, and MGE May wheat settled 7 1/4 cents lower at US$5.08 1/4.

 

There was no fresh news to support the market and light local selling encountered little resistance, a CBOT floor broker said.

 

Trading was thin and very choppy for much of the session, he added.

 

The only news out was routine wheat exports to Taiwan and South Korea overnight, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D. Japan is tendering for wheat Thursday, but the amount is less than in prior purchases and not positive, Hoops said.

 

There was little commercial or speculative selling and the market needs a catalyst to move it out of its recent trading range, a CBOT floor analyst said.

 

The USDA releases its March wheat supply and demand estimates on Friday and wheat could consolidate ahead of the report, Hoops said.

 

U.S. wheat ending stocks for the 2006-07 marketing year are estimated at 473 million bushels, according to a survey of 12 analysts conducted by Dow Jones Newswires.

 

In February, the USDA estimated U.S. wheat ending stocks at 472 million bushels.

 

On daily open auction technical charts, CBOT May ended below most major moving averages and settled at its lowest level since Feb. 15.

 

In CBOT trades, JP Morgan bought 200 May and Man Financial sold 300 May and 200 July. Overall fund selling was estimated at 1,000 lots.

 

 

Kansas City Board of Trade

 

Hard red winter wheat futures settled lower as "the path of least resistance" was lower, a KCBT floor analyst said. Weaker corn futures also exerted a negative pull on the market, but the nearby contracts appear to have found a floor near the US$5.00 level, the analyst added.

 

In mid-day KCBT trades, JP Morgan bought 200 May, Man Financial bought 200 May and Prudential sold 100 May.

 

On open auction technical charts, May finished beneath most of its major moving averages.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished lower as the market followed the other grains in quiet activity, a floor trader said. Trading was "pretty quiet" as most market participants have positioned themselves where they want to be ahead of Friday's USDA report, the trader said.

 

Farmer and hedge-related selling was light, a floor analyst noted.

 

On daily open auction technical charts, May wheat settled between its major moving averages.