US Wheat Review on Monday: Ends higher; rebounds from Friday's losses

 

 

U.S. wheat futures ended higher Monday, rebounding from last week's setback on technically based chart buying and positioning ahead of Wednesday's supply-and-demand report.

 

May CBOT wheat ended 1 1/2 cents or 0.30% higher at US$4.95, May KCBT wheat settled 1 1/2 cents or 0.30% higher at US$5.02, and May MGE wheat finished 1 1/4 cents or 0.24% higher at US$5.13 1/2.

 

The market started the week with an oversold attitude, following the market's drop to two-week lows last week, said Shawn McCambridge, senior grains analyst with Prudential Bache in Chicago.

 

Selling interest was exhausted on last week's slide, with the ability of the May contract to hold underlying chart support Friday providing encouragement to buyers, he added.

 

However, futures failed to attract any significant follow-through buying, as lackluster export demand and ample world supplies remain bearish features limiting upside potential. Activity was light, with buyers unwilling to aggressively push prices without any significant changes expected in Wednesday's supply-and-demand report to change overall bearish market sentiment.

 

Meanwhile, futures did receive some underlying support from concerns about potential flooding problems as a result of melting snow cover that may lead to planting delays in the spring, said Sterling Smith, market analyst with Country Hedging in St. Paul, Minn.

 

The flood concerns enticed participants to add a little risk premium to prices, he added.

 

The flood potential would affect durum and spring-wheat plantings, but in the middle of March, this remains underlying chatter in the market, analysts said.

 

In CBOT trades, speculative fund buying was estimated at 1,000 lots.

 

U.S. Department of Agriculture is scheduled to release its March supply-and-demand report Wednesday 8:30 a.m. EST. The average of the 18 analyst predictions from a Dow Jones Newswires survey estimates 2009-10 U.S. ending stocks at 971 million bushels, down from the February USDA estimate of 981 million.

 

 

Kansa City Board of Trade

 

KCBT wheat ended higher, up in unison with Chicago wheat in thin trade, a KCBT wheat trader said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures ended higher, following the lead of other U.S. wheat markets, traders said.