March 17, 2006

 

US Wheat Review on Thursday: Lower; CBOT leads on technical,fund sales

 

 

U.S. wheat futures ended lower for the fourth straight session amid a combination of technical selling and fund liquidation overlaying a forecast for precipitation in the U.S. Central Plains this weekend, sources said.

 

"The market acted heavy all day," a CBOT floor analyst said. The market was on the defensive for much of the session and technical and fund selling pressured futures to the day's lows near the close, he added.

 

Fund selling was estimated at 7,000 contracts, with much of it in the last hour of trading, floor sources said.

 

Forecasts that predict precipitation in the U.S. Central Plains over the weekend and into early next week continue to weigh on the market after last week's advances, the floor analyst said.

 

Light rain is forecast to develop Friday in the southern parts of the region Friday with additional precipitation developing Saturday and continuing into Monday, DTN Meteorlogix weather said. Total moisture accumulation on Saturday is expected .10-.50 inch with locally heavier amounts in the east. Precipitation totals of .25-1.00 inch are expected on Sunday with locally heavier amounts possible, DTN MeteorlogixWeather Service said.

 

Weekly wheat export sales totaled 377,300 metric tonnes for the week ended March 9, according to the U.S. Department of Agriculture, with 40,000 tonnes of the total sold for the 2006-07 crop year.

 

Exports of soft red winter wheat were a negative 3,300 metric tonnes for the week, USDA reported.

 

On technical charts, May settled beneath its 50-day moving average and traded down to its lowest level since Feb. 2.

 

CBOT May wheat fell 9 1/4 cents to US$3.52 3/4 per bushel, and July dropped 8 3/4 cents to US$3.64 3/4.

 

In CBOT trades, the Refco division of Man Financial bought 600 May, R.J. O'Brien bought 500 May, Tenco bought 400 May, JP Morgan bought 300 May, Man Financial bought 300 December and 200 May, and Goldenberg-Hehmeyer bought 200 July.

 

Shatkin Arbor sold 1,500 May, Citigroup sold 2,000 May, Man Financial sold 1,000 December, and JP Morgan sold 1,400 May.

 

 

Kansas City Board of Trade

 

KCBT wheat futures finished lower as fund selling and long liquidation ahead of this weekend's expected precipitation in the U.S. Central Plains kept futures on the defensive, sources said. Weekly export sales of 377,300 metric tonnes were within the range of analysts' estimates but had little impact as recent liquidation of previously established positions continued, a floor trader said.

 

KCBT May settled 7 1/2 cents lower at US$4.13 3/4 cents per bushel, and July fell 6 3/4 cents to US$4.17 3/4.

 

On technical charts, KCBT May settled at its 50-day moving average, and traded at its lowest level since Feb. 14.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished weaker as fund- and commercial-related selling combined to weigh on prices, an MGE floor trader said. Light scale- down buying did emerge near the lows of the day, he added.

 

In MGE trades, ADM sold 1,000 July

 

MGE May wheat fell 9 cents lower at US$4.02 1/2, and July dropped 8 cents to US$4.09.

 

Minneapolis grain receipts totaled 91 train cars of wheat and 3 cars of durum Thursday compared to 234 and 78 on Wednesday, and 107 cars of wheat and 160 cars of durum one year ago.

 

On Friday after the close, the Commodity Futures Trading Commission is scheduled to release the commitment of traders data as of Mar. 14.