March 28, 2006

 

US Wheat Review on Monday: Down on lack of lnputs, thin fund selling

 

 

U.S. wheat futures settled modestly lower Monday as the lack of fresh fundamental inputs and light fund selling combined to press prices, floor sources said.

 

Light spillover buying from corn and soybeans had supported futures after the opening, with light buy stops touched, a floor trader said. However, the lack of any additional buying interest helped to evaporate the gains before midsession, he added.

 

News that Egypt had purchased 120,000 metric tonnes of French wheat also was viewed negatively, a floor analyst said.

 

Export inspections of 15.241 million bushels was within the 14-16 million bushels expected by analyst and had no impact, the analyst added.

 

The market is slowing down ahead of the U.S. Department of Agriculture acreage and stocks reports on Friday, a CBOT trader said. It will probably remain slow until the reports are released, he added.

 

In addition, precipitation is forecast for the hard red winter wheat belt for later this week, keeping speculative buyers on the sidelines, he said.

 

A few showers are forecast for Monday in the far southern locations in the U.S. Central Plains with dry weather returning Tuesday, DTN Meteorlogix weather said. Light precipitation is forecast Wednesday with a chance for showers and thundershowers Thursday with amounts averaging 0.30-1.50 inches in northern and eastern locations and 0.10-0.50 inch in the southwest, DTN Meteorlogix said.

 

CBOT May wheat declined 2 3/4 cents to US$3.39 3/4 per bushel, and July also fell 2 3/4 cents to US$3.51 3/4.

 

In CBOT trades, ADM bought 200 May, ABN Amro bought 200 May, Citigroup bought 400 May, Fimat bought 400 May, JP Morgan bought 300 May, Tenco bought 500 December and 100 July, UBS bought 200 May and Rand Financial bought 100 May.

 

Deutsche Bank sold 2,000 December, Citigroup sold 400 May, Man Financial sold 100 May, and RJ O'Brien sold 100 May.

 

Commodity fund selling was estimated at 2,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures finished lower and at or near session lows with May unable to hold above US$4.00 as technical selling pressured prices on the closing bell, sources said.

 

There was not much buying interest and probably won't be until the market sees whether precipitation forecasts were correct, a KCBT floor trader said.

 

The market continues to lose weather premium, he added.

 

KCBT May settled 4 cents lower at US$3.97 1/2 cents per bushel, and July slid 2 3/4 cents to US$4.02 1/2.

 

In KCBT trades, ADM Investor Services sold 600 July and 200 December, Fimat sold 400 May, Frontier futures sold 150 may and 150 July and ABN Amro bought 200 July.

 

Frontier futures sold 200 May and 300 July, ABN Amro sold 350 May and 300 July, Fimat sold 400 July and 250 May, and Man Financial sold 200 May.

 

 

Minneapolis Grain Exchange

 

Spring wheat ended lower, with an MGE trader noting "it was the quietest session in a long time."

 

The weather continues to provide good moisture and spring wheat futures were dragged down by the other wheat markets, he added

 

MGE May wheat settled 2 1/4 cents lower at US$3.90 1/2, and July also ended 2 1/4 cents lower to US$3.96 1/2.

 

On Monday afternoon, several states are scheduled to release weekly wheat crop conditions, including Kansas. As of March 19, 24% of the state's crop was rated in good-to-excellent condition while 38% of the state's crop was rated in very poor to poor condition.