March 15, 2006

 

US Wheat Review on Tuesday: Lower on follow through, technical sales

 

 

U.S. wheat futures ended moderately lower Tuesday, adding on to Monday's losses as technical selling, follow through selling, and long liquidation kept prices on the defensive from the opening bell, sources said.

 

Futures gapped open lower in both CBOT and KCBT May futures as follow through selling from Monday's declines and overnight weakness pushed prices lower, traders said.

 

Fund liquidation also added to the declines, as did concerns about precipitation prospects in the U.S. Central Plains this weekend, the traders added.

 

Although most forecasters expect precipitation in the U.S. Central Plains this weekend, there is some debate about the amount and coverage the region will receive, a floor analyst said.

 

Despite the uncertainty, the market was stuck in a liquidation mode with CBOT wheat following the weakness in KCBT futures, before stabilizing after mid-session at lower levels, he added.

 

On technical charts, CBOT May gapped open lower, falling below its 50-day moving average during the session before recovering to settle above it. May traded at it's lowest since Feb. 15, and settled beneath its 10-day and 20-day moving averages.

 

CBOT May wheat declined 5 cents to US$3.62 1/2 per bushel, and July lost 5 1/2 cents to US$3.74.

 

In CBOT trades, Calyon Financial bought 500 May, Fimat bought 1,500 May, DT Trading bought 700 May, and the Refco division of Man Financial bought 300 May.

 

ABN Amro sold 1,000 May, O'Connor sold 1,400 May, JP Morgan sold 600 May, the Refco division on Man Financial sold 500 May, Goldenberg-Hehmeyer sold 300 May and FC Stonnee sold 200 July.

 

Commodity funds were net sellers of 4,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended moderately lower, extending Monday's declines.

 

Follow through selling from Monday and fund and technical selling led the market lower, sources said.

 

Forecasts for precipitation in the hard red wheat belt remained the catalyst for the losses, they added.

 

KCBT May wheat has lost 32 1/4 cents since reaching Friday's high of US$4.56.

 

KCBT May finished 11 cents lower at US$4.23 3/4 per bushel, and July fell 11 1/4 cents to US$4.26 1/4.

 

On technical charts, KCBT May gapped open lower and traded down to its lowest level since mid-February.

 

In KCBT trades, Fimat bought 900 May and 300 July, ABN Amro bought 500 May and 500 July, Frontier Futures bought 600 July and 300 May, and UBS bought 500 May and 200 July.

 

Man Financial sold 1,200 May and 800 July, ABN Amro sold 500 May and 500 July, UBS sold 600 July and 200 May, and the Refco division of Man Financial sold 400 May and 700 July.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower but off of session lows as light position squaring after mid-session helped trim losses set on spillover selling from KCBT wheat, sources said.

 

MGE May wheat settled 7 1/2 cents lower to US$4.14 1/4, and July finished 6 1/2 cents lower to US$4.19.

 

Minneapolis grain receipts totaled 95 train cars of wheat and 12 cars of durum Monday, compared to 80 cars of wheat and one car of durum a year ago.