March 15, 2006

 

US Wheat Outlook on Wednesday: Steady as market consolidates

 

 

U.S. wheat futures are expected to start Wednesday's open auction session steady as the market consolidates after 2 days of heavy losses, sources said.

 

In overnight e-CBOT trading, May wheat ended unchanged at $3.62 1/2 and July gained 1 1/2 cents to $3.75 1/2.

 

Overnight at the KCBT, May rose 2 3/4 cents to $4.26 1/2, and July ended up 3 3/4 cents to $4.30.

 

The market is due for a little light bounce, said John Kleist of Kleist Ag Consulting in Arlington Heights, Ill. Wheat finally saw open interest decline as the amount of long position holders declined, he noted.

 

The weather is still the focus of the market and the forecasts still see a high chance of precipitation this weekend. Price stabilization in Chicago wheat depends on what happens in Kansas City, he added.

 

Some significant precipitation is possible in dry areas of the U.S. Central Plains over the weekend into early next week with some additional precipitation possible during the middle of next week, DTN Meteorlogix weather said.

 

The market should consolidate after the recent break, a CBOT floor analyst said. There is little fresh news out and the forecasts still look for rain in the U.S. Central Plains. The direction the market goes is largely dependent upon what the funds want to do, he added.

 

On technical charts, the technical picture for CBOT May wheat is bearish, with a short-term top confirmed on the daily chart at the Feb. 28 price peak, a technical analyst said. He sets first resistance at $3.65 3/4 and then at $3.71. Support is pegged at $3.58 1/2 and then at $3.50.

 

May KCBT wheat broke below important chart support at the $4.30 1/2-$4.30 area, the analyst said. He pegs first resistance at $4.31 and then at $4.34, while first support is seen at $4.18 and then at $4.10.

 

Cash wheat basis bids were mostly unchanged Wednesday. Soft red wheat cash bids were mixed with Evansville Ind. unchanged at 30 cents under the May.

 

Hard red winter cash basis bids were unchanged with Hutchinson, Kan. Unchanged at 15 cents under the May future.

 

Hard red spring basis bids were unchanged with Minot N.D. unchanged at 30 cents under May.

 

In other wheat news, Syria sold 100,000 metric tonnes of soft milling wheat to Egypt, Syria's General Establishment for Cereal Processing and Trade, or Hoboob said Wednesday.

 

Japan's Ministry of Agriculture, Forestry and Fisheries bought 17,440 metric tonnes of feed wheat and 218,962 tonnes of feed barley in a tender concluded Wednesday, a ministry official said Wednesday. No details on the origin or price of the wheat or barley shipment were available.

 

Ukraine harvested 18.69 million metric tonnes of wheat in 2005, 6.7% or 1.17 million tonnes more than in 2004, according to final figures released by the state statistics committee Wednesday.

 

Russia's spring grain planting will begin a week later than normal due to cold weather, the agriculture ministry's press service said Wednesday, quoting Agriculture Minister Alexey Gordeyev.

 

Gordeyev said farmers would need to replant winter grains with spring grains on about 25% of the panted area because of damage caused by unusually sever frosts in winter.