March 16, 2006

 

US Wheat Outlook on Thursday: Seen 1-2 cents lower, following e-CBOT

 

 

U.S. wheat futures are forecast to begin trading 1-2 cents lower Thursday following weaker prices in overnight trading and the lack of fresh news, sources said.

 

In overnight e-CBOT trading, May wheat slipped 1 3/4 cents to $3.60 1/4, and July also fell 1 3/4 cents to $3.71 3/4.

 

Overnight at the KCBT, May declined 1 3/4 cents to $4.19 1/2, and July fell 1 1/2 cents to $4.23.

 

There wasn't much fresh news overnight and export sales were in line with estimates, but it still looks like decent moisture coverage in the U.S. Central Plains this weekend and that continues to be the focus, a CBOT floor analyst said.

 

Weekly wheat export sales totaled 377,300 metric tonnes for the week ended March 16, in line with traders estimates of 300,000-550,000 metric tonnes.

 

It will be mainly dry Thursday in the U.S. Central Plains with a chance for scattered showers with amounts 0.25-1.00 inch and locally heavier, through the southern and southeast sections of the region Friday and into Saturday, DTN Meteorlogix weather said.

 

A chance of rain, snow and possible thundershowers is forecast Sunday into Monday. Precipitation should average 0.30-1.00 inch and locally heavier coverage could be quite high. Significant snow is possible from central Kansas westward, Meteorlogix said.

 

Egypt's General Authority for Supply Commodities, GASC, said Thursday it purchased 120,000 metric tonnes of wheat.

 

GASC bought 60,000 tonnes of French wheat at $137.50 from Toepher and 60,000 of U.S. soft white wheat at $132.18/tonne from Columbia Grain, said Nomani Nomani, general manager of GASC.

 

Japan's Ministry of Agriculture, Forestry and Fisheries bought 133,000 metric tonnes of wheat from the U.S. and Canada in a tender concluded Thursday, a ministry official said. 105,000 tonnes was of U.S. origin with 28,000 tonnes Canadian. The grades of wheat weren't disclosed.

 

On technical charts, the bears have fresh downside technical momentum in CBOT May wheat with the recent price gap moves lower on the daily bar chart, a technical analyst said. He pegs first resistance at $3.66 1/2, Wednesday's high and then at $3.72. Support is seen at $3.58 1/2 and then at $3.54 1/2.

 

In May KCBT wheat, it will take a close back above resistance at $4.46 to provide bulls with some fresh upside technical momentum, he said. First resistance is seen at $4.27 Wednesday's high and then at $4.31. First support is seen at $4.16 1/2 and then at $4.10.

 

In other wheat news, Ukraine's farmers will have to replant 546,000 hectares of winter wheat, or 10.6% of the total planted area, with sprig wheat as a result of the damage done by February weather, the Agriculture Ministry said.

 

Analytical firm Strategie Grains said the E.U. could have a high level of wheat export availability in the July 2006-June 2007 season if weather conditions remain near ideal through harvest.

 

The firm sees the E.U. having export stocks availability as higher as 23 million metric tonnes.