March 11, 2006

 

US Wheat Review on Friday: Higher on funds, weather; CBOT fades late

 

 

U.S. wheat futures ended higher Friday, as fund and technical buying in Chicago, coupled with continued weather concerns in the U.S. Central Plains lifted futures higher with new life-of-contract highs set in several months.

 

Fund buying led to technical buy stops touched off in May wheat early in the session, with futures rallying to their highest levels since Feb. 28. CBOT July matched its contract high.

 

However, the gains in Chicago wheat faded late in very choppy trading, with local selling - thought to be position-squaring - pushing prices to their lows of the day near the closing bell, a floor analyst said.

 

"This is a gray area for Chicago wheat right now; it doesn't know what it wants to do," the analyst said.

 

Friday morning's U.S. Department of Agriculture's supply and demand report had little impact, traders said.

 

The USDA kept its estimate of U.S. wheat ending stocks at 542 million bushels, unchanged from the February report, and 1 million bushels below the average analyst estimate of 543 million bushels.

 

The market didn't expect any changes from this report and didn't get any, a CBOT wheat trader said.

 

"It's too early to see any changes for wheat," the CBOT trader said. Any changes will cone in the next few reports, he added.

 

In the U.S. Central Plains it will be manly dry, with only a few light or very light showers Friday through Sunday and the best chance for moisture in the in the far north and far east to southeast on Sunday, DTN Meteorlogix weather said. In its 6-to-10 day outlook, Meteorlogix expects precipitation near to below normal.

 

CBOT March wheat ended 1/2 cent higher to US$3.81 1/2 per bushel, and July settled 1/4 cent higher at US$3.93 1/2, after matching its contract high of US$4.00 earlier in the session.

 

In CBOT trades, O'Connor bought 1,000 July and 600 May, Man Financial bought 500 May and 500 December, Fimat bought 400 May and 300 July, Rand Financial bought 300 July and 200 May, and DT Trading bought 200 May.

 

Fimat sold 1,000 May, the Refco division of Man Financial sold 200 May, Citigroup sold 200 May and JP Morgan sold 100 May.

 

Commodity fund buying was estimated at 4,300 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended higher as heavy buying pushed prices up. The USDA report was forgotten by 9:35 a.m., a KCBT floor trader said. There is no reason to be bearish this market right now, he added.

 

There is a chance for rain Sunday or Monday, but after that there is no rain in the forecast in the hard red wheat belt and "we definitely need rain," the trader said. KCBT May and July made new life-of-contract highs.

 

KCBT May finished 9 1/2 cents higher at US$4.53 1/4 per bushel and July settled 8 cents higher at US$4.59 1/2.

 

In KCBT trades, ABN Amro bought 400 May and 400 July, ADM bought 500 July, Frontier Futures bought 300 July, Fimat bought 200 May and 200 July, Man Financial bought 300 May and 300 July, and the Refco division of Man Financial bought 400 July.

 

ADM sold 300 July, Frontier Futures sold 250 May and 250 July, and the Refco division of Man Financial sold 300 July.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled higher as the market continues to follow KCBT and Chicago higher, a floor trader at the exchange said. Light commercial buying also added support, and there was nothing for sale Friday, he added.

 

MGE May wheat gained 3 1/2 cents to US$4.34 3/4, and July rose 2 cents to US$4.39 3/4. MGE May set a new contract high of US$4.40 earlier in the session.

 

On Friday, the Commodity Futures Trading Commission is scheduled to release the latest commitment of trader's data as of March 7, and on Monday the USDA is scheduled to release the weekly export inspections at 10 a.m. CST.