March 21, 2006

 

US Wheat Review on Monday: Down on moisture in US central plains

 

 

U.S. wheat futures ended moderately lower Monday, falling after weekend rainfall in the U.S. Central Plains and snow falling in Kansas Monday added additional moisture, floor sources said.

 

The precipitation is providing some moisture relief to the crop in the plains, a CBOT-floor trader said.

 

The moisture over the weekend pressured the market and the snowfall Kansas received Monday added to the price weakness, a market analyst said.

 

Weekend precipitation averaged 0.25-1.00 inch in central and eastern Kansas and 0.50-2.00 inches through north-central and northeast Texas over the weekend, DTN Meteorlogix weather said.

 

In addition, snowfall Monday was expected to average 7-15 inches through western and northern Kansas, with snowfall in central Kansas expected to average 4-8 inches, according to DTN Meteorlogix.

 

There was not much reason to buy it Monday, a floor analyst said. The forecast for moisture was realized and and there was light technical selling with fresh buying interest thin, he added.

 

Export inspections for the week ended March 16 were 14.194 million bushels according to the U.S. Department of Agriculture, below the 16-21 million bushels expected by analysts.

 

News that Jordan purchased 300,000 metric tonnes of soft Syrian milling wheat before the opening was viewed negatively as it highlights the gap between U.S. soft wheat prices and the rest of the world, a floor trader said before the opening.

 

On technical charts, CBOT May settled beneath its 200-day moving and traded below its 100-day moving average before ending above it.

 

CBOT May wheat fell 7 1/4 cents to US$3.50 1/4 per bushel, and July declined 7 3/4 cents to US$3.62 1/4.

 

In CBOT trades, Fimat bought 2,000 May, Calyon Financial bought 400 May, JP Morgan bought 300 May, Citigroup bought 300 May, and Prudential Financial bought 400 May.

 

Iowa Grain sold 1,000 May, the Refco division of Man Financial sold 600 May and 600 July, Calyon Financial sold 600 May, Citigroup sold 300 May, and ABN Amro sold 200 May.

 

Commodity fund selling was estimated at 3,300 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures settled lower as the precipitation over the weekend and extending into Monday as snowfall in Kansas, pushed prices lower, a KCBT trader said.

 

The market broke on the expected weather with light fund and technical selling adding to the declines, a KCBT floor trader said.

 

KCBT May traded down to its lowest level since Feb. 2.

 

In KCBT trades, ABN Amro bought 400 May and 300 July, Fimat bought 800 July, and 500 May, Man Financial bought 500 July, 300 May and 100 December, and ADM Investor Services bought 600 July and 200 May.

 

ABN Amro sold 800 July, Prudential Financial sold 500 July and 200 May, Fimat sold 300 May and 200 July, and the Refco division of Man Financial sold 300 May and 500 July.

 

KCBT May fell 7 3/4 cents to US$4.13 3/4 cents per bushel, and July also fell 7 3/4 cents to US$4.14 3/4.

 

On technical charts, KCBT May settled below its 50-day moving average.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished lower as spillover weakness from hard red wheat futures in Kansas City weighed on prices, a MGE trader said. Spring wheat followed hard red wheat lower with light cash connected selling also noted early, the trader said.

 

MGE May wheat ended 6 1/2 cents lower at US$3.99 3/4, and July fell 9 cents to US$4.04 1/2.

 

On Monday afternoon, several states are scheduled to release weekly wheat crop conditions.