March 30, 2006

 

US Wheat Review on Wednesday: Ends higher but below early gains

 

 

U.S. wheat futures settled higher Wednesday but backed off from highs reached earlier in the day. Activity was two-sided in modest trade, sources said.

 

Light spillover from Kansas City Board of Trade wheat futures and technical buying helped lift Chicago Board of Trade futures higher on the opening, floor sources noted.

 

News that India was interested in purchasing up to 2 million metric tonnes of optional-origin wheat to bolster government stocks, and that Iraq had purchased 100,000 tonnes of U.S. hard red wheat for delivery in 2005-06 was also supportive, a floor analyst said.

 

Light fund buying and position squaring after recent declines and ahead of Friday's U.S. Department of Agriculture Prospective Plantings and Quarterly Stocks reports helped extend prices to session highs before light commission house and local selling erased most of the gains, a floor trader said.

 

The market followed hard red futures and hard red was firm on ideas recent losses were overdone, the floor analyst said. The wheat in the U.S. west-central Plains still needs moisture, but "everyone is waiting on the USDA reports," he added

 

Central Kansas through Central Oklahoma are forecast to receive up to 1 inch of rain Wednesday through Thursday before drier weather returns on Friday. The Texas Panhandle and the Southwestern Plains are expected to receive up to .25 inch, DTN Meteorlogix weather said.

 

The southern Plains are forecast to receive additional showers in the southern Plains near the end of the week, and next week brings the possibility of additional moisture, DTN Meteorlogix added.

 

CBOT May wheat ended up 1/2 cent to US$3.41 3/4 per bushel, and July settled unchanged at US$3.54 1/2.

 

In CBOT trades, Fimat bought 400 May and 500 July, Iowa Grain bought 300 May, Man Financial bought 200 May, O'Connor bought 400 July, RJ O'Brien bought 400 July, Rand Financial bought 600 May and 300 July, and the Refco division of Man Financial bought 600 May.

 

O'Connor sold 600 May and 200 December, Iowa Grain sold 100 May, JP Morgan sold 200 May, O'Connor sold 600 May and 200 December, Rand sold 100 May, and the Refco division of Man Financial sold 300 May.

 

Commodity fund buying was estimated at 1,500 contracts.

 

In spread trading, Calyon Financial bought 800 May wheat and sold 800 May corn.

 

 

Kansas City Board of Trade

 

KCBT wheat futures finished higher after May gapped open higher on technical charts as early fund and technical buying lifted prices, a KCBT floor trader said.

 

After the buying eased, light local selling trimmed the gains, with everyone waiting on Friday's reports and the weather, the trader added.

 

News from the USDA that Iraq had bought 100,000 metric tonnes of U.S. hard red wheat for delivery in 2005-06 added modest support, a source said.

 

In KCBT trades, Frontier Futures bought 420 July and 100 May, ADM Investor Services bought 200 July and 100 December, Man Financial bought 200 July, Fimat bought 150 July and 100 May, the Refco division of Man Financial 300 July, and Shay Grain bought 320 December.

 

The Refco division of Man Financial sold 250 July and 150 May, Country Hedging sold 100 May and 100 July, Man Financial sold 400 May and 400 July, Prudential Financial sold 200 July, Tenco sold 200 July, and the Refco division of Man Financial sold 100 May and 250 July.

 

KCBT May rose 4 3/4 cents to US$4.06 1/2 cents per bushel, and July gained 5 1/4 cents to US$4.11 3/4.

 

 

Minneapolis Grain Exchange

 

Spring wheat ended higher, "dragged higher by the gains in KCBT," an MGE floor trader said. Light inter-market spreading also added support with people buying spring wheat and selling hard red and soft red futures in light volume, the trader added.

 

Minneapolis grain receipts totaled 239 cars of wheat and 110 cars of durum, compared to 222 cars of wheat and 42 cars of durum a year ago.

 

MGE May wheat settled 2 3/4 cents higher at US$3.95 3/4, and July gained 2 cents to US$4.00 3/4.

 

On Thursday, the USDA is scheduled to release the weekly export sales for the week ended March 23. Analysts expect sales between 250,000-550,000 metric tonnes. Sales for the week ended March 16 totaled 482,600 tonnes.