March 8, 2007

 

US Wheat Review on Wednesday: Up modestly on fund, spillover buying

 

 

U.S. wheat futures settled modestly higher Wednesday, benefiting from light commodity fund buying and bargain hunting after recent price weakness, floor traders said.

 

Chicago Board of Trade May wheat gained 5 cents to US$4.78, Kansas City Board of Trade May wheat settled up 1 1/4 cents to US$5.02 1/2, and Minneapolis Grain Exchange May wheat settled ended 5 cents higher at US$5.13 1/4 a bushel.

 

Wheat was supported by the gains in soybeans and corn as well as light speculative fund buying, said Vic Lespinasse, of AG Edwards & Sons.

 

In addition, crude oil was higher, silver and gold were stronger and the spillover strength from the outside markets helped wheat trade higher, he added.

 

Overall commodity fund buying at the CBOT was estimated at 3,000 contracts.

 

The market was overdone to the downside and there was some light bottom-picking trading that helped support wheat, a CBOT commercial-connected trader says.

 

Trading was modest with the lack of fresh news limiting volatility, he added.

 

The whole grain floor "just seemed to feed on itself," the trader said.

 

Wheat might see some position squaring Thursday ahead of the U.S. Department of Agriculture Supply and Demand report Friday, however most people are looking ahead to the planting intentions report due out at the end of the month, Lespinasse 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, up 1 million bushels from the USDA's February estimate.

 

On daily open auction technical charts, CBOT May traded an inside day, between the high and low established in Tuesday's activity.

 

In CBOT trades, Tenco bought 500 May, Iowa Grain bought 600 May, Fortis bought 300 May and Man Financial sold 200 May and 200 July.

 

 

Kansas City Board of Trade

 

Hard red winter wheat futures finished with modest gains in thin trade as spillover from higher grain prices at the CBOT supplied support, a KCBT floor analyst said.

 

There was "nothing to trade off of" and the market followed soybeans and corn higher, the analyst added.

 

In mid-day KCBT trades ADM bought 200 July.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled higher in light trading volume with the market following the firm tonnee in Chicago and outside commodity markets. It was a slow news day and there was little to trade off of, so spring wheat followed the other markets, a floor trader said.

 

On daily open auction technical charts, May wheat traded an inside day and ended above most of its major moving averages.

 

Thursday the USDA is scheduled to release the weekly export sales report for the period ending March 1. Analysts expect wheat sales between 300,000-650,000 metric tonnes.