March 29, 2006
US Wheat Review on Tuesday: Up on position squaring in light trade
U.S. wheat futures finished with light gains Tuesday, finishing in positive territory for the first time since last week. The absence of strong selling interest and light position squaring provided support for the market ahead of Friday's USDA reports, floor sources said.
The market was directionless, a floor analyst said.
News before the open that Iraq had purchased an additional 300,000 tonnes of U.S. wheat provided light support to futures, the analyst said.
However, it was unclear if the U.S. wheat purchased was for delivery in 2005-06 or 2006-07, limiting the impact, the analyst said.
The market is waiting on Friday's reports but the focus remains on the hard red winter wheat market and the weather, a floor trader said.
The U.S. Department of Agriculture is scheduled to release the planting intentions and quarterly stocks reports on Friday at 7:30 a.m. CST.
In the U.S. Central Plains there is a chance for showers to develop Wednesday and Thursday with amounts averaging 0.25-1.00 inch through eastern locations but only a trace to 0.35 inch in the west, DTN Meteorlogix weather said.
Dry weather is forecast to return Friday before another chance for sprinkles or light showers during the weekend, DTN Meteorlogix said. Temperatures should average near to above normal for most of the period.
CBOT May wheat gained 1 1/2 cents to US$3.41 1/4 per bushel, and July settled 2 3/4 cents higher at US$3.54 1/2.
In CBOT trades, Fimat bought 400 July and 200 May, Goldenberg-Hehmeyer bought 100 May, Man Financial bought 100 May, the Refco division of Man Financial bought 200 May, UBS bought 200 July, and JP Morgan bought 100 May.
ABN Amro sold 300 May, O'Connor sold 500 May, JP Morgan sold 200 May, Prudential Financial sold 200 May and 100 December, RJ O'Brien sold 300 May and Rand Financial sold 200 May.
Kansas City Board of Trade
KCBT wheat futures ended with modest gains in quiet trading as light position squaring steadied prices, a KCBT floor trader said. There was a lack of interest Tuesday with the market waiting on the reports for direction, he added.
News that several hard red winter wheat states reported a slight improvement in crop conditions Monday afternoon had little impact with the gains already factored in, a floor analyst said.
In Kansas, 26% of the crop is now rated in good-to- excellent condition, up 2 percentage points from last week; 29% of the crop was rated in poor-to-very poor condition compared to 38% the previous week.
In Oklahoma, 6% of the crop is rated in good-to-excellent condition, no change from the previous week; 65% of the crop is rated in poor-to-very poor condition, versus 70% last week.
In Texas, 7% of the crop is rated in good-to-excellent condition, up 2 percentage points from last week; 78% of the crop is rated poor-to-very poor versus 80% last week.
News that Iraq had bought 300,000 metric tonnes of U.S. wheat on top of the recent 150,000 tonnes sold added to the steady tonnee, a source said.
In KCBT trades, ABN Amro bought 400 July and 100 May, Benson-Quinn bought 250 December, 100 May and 100 July, the Refco division of Man Financial bought 200 July and FC Stonnee bought 100 May and 100 December.
The Refco division of Man Financial sold 350 May and 100 December, Man Financial sold 200 May and 200 July, Benson-Quinn sold 100 May and 300 July and Fimat sold 100 May and 150 July.
KCBT May gained 4 1/4 cents to US$4.01 3/4 cents per bushel, and July rose 4 cents to US$4.06 1/2.
Minneapolis Grain Exchange
Spring wheat finished higher despite the "market not having any conviction in selling it or buying it," an MGE floor trader said.
Activity was light with the lack of fresh news contributing to the quiet tonnee, he added.
Minneapolis grain receipts totaled 105 cars of wheat and 28 cars of durum, compared to 159 cars of wheat and 58 cars of durum a year ago.
MGE May wheat ended 2 1/2 cents higher at US$3.93, and July ended 2 1/4 cents higher at US$3.98 3/4.
