March 22, 2006

 

US Wheat Review on Tuesday: Higher on market consolidation

 

 

U.S. wheat futures finished with modest gains Tuesday as the market consolidated in light trading after recent price weakness and precipitation in the U.S. Central Plains over the past several days, floor analysts said.

 

The market was oversold and due for a bounce, a commission house analyst said. Wheat has been weak on the precipitation forecasted for the hard red wheat belt and now that the moisture has occurred, the market stabilized, he added.

 

The market was in consolidation mode Tuesday, a floor source said. May wheat has declined almost 40 cents from its high reached less than two weeks ago and the market put back a little premium, the source added.

 

A late rally in corn futures helped to extend the light gains, a pit trader said.

 

Commodity fund buying in corn futures is estimated at 10,000 contracts.

 

On technical charts, CBOT May settled beneath its 200-day moving average and above its 100-day moving average for the second straight session.

 

CBOT May wheat settled 2 1/4 cents higher at US$3.52 1/2 per bushel, and July gained 2 1/2 cents to US$3.64 3/4.

 

In CBOT trades, UBS bought 500 May, Shatkin bought 500 May, Calyon Financial bought 300 May, Goldenberg-Hehmeyer bought 300 May, RJ O'Brien bought 300 May, Citigroup bought 200 May, and Man Financial bought 300 May.

 

Fimat sold 300 July and 100 May, Calyon Financial sold 200 May, O'Connor sold 300 May, Citigroup sold 100 July, and the Refco division of Man Financial sold 100 July.

 

Commodity fund selling was estimated at 2,500 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures finished higher as the market consolidated after the recent price break based on the moisture in the U.S. Central Plains, a KCBT floor trader said. Volume was thin as the market corrected after the recent losses, the floor trader added.

 

The Kansas weekly crop conditions report, released Monday afternoon, noted a 5-percentage point decline, from 29% to 24% in the good-to-excellent category in the state's wheat crop but it had little impact with one trader noting that report didn't take into account the moisture received late in the weekend.

 

In KCBT trades, Man Financial bought 500 July, the Refco division of Man Financial bought 300 July, ABN Amro bought 300 May and 300 July, and Benson-Quinn bought 200 May and 200 July.

 

Benson-Quinn sold 500 May and 200 July, Prudential Securities sold 300 July, Country Hedging sold 100 May and 200 July and ABN Amro sold 200 May.

 

KCBT May rose 3 1/4 cents to US$4.17 cents per bushel, and July gained 5 1/2 cents to US$4.20 1/4.

 

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

 

 

Minneapolis Grain Exchange

 

Spring wheat ended higher as spillover support from wheat futures at the KCBT helped provide support as did light commercial buying. Selling interest was thin, with an MGE floor trader noting "there was nothing for sale."

 

MGE May wheat settled 3 3/4 cents higher at US$4.03 1/2, and July rose 5 cents to US$4.09 1/2.

 

Cash grain receipts in Minneapolis totaled 244 train cars of wheat and 16 cars of durum compared to 249 cars of wheat and 4 cars of durum a year ago.