March 31, 2006

 

US Wheat Review on Thursday: Settle higher ahead of USDA reports

 

 

U.S. wheat futures ended higher Thursday in quiet activity as market participants prepared for Friday's U.S. Department of Agriculture's Prospective Plantings and Quarterly Grain Stocks reports.

 

The average of estimates from eight analysts surveyed by Dow Jones Newswires project U.S. 2006 all-wheat plantings at 58.294 million acres, compared to the estimate of 58.0 million acres forecast in January by the USDA and 2005 plantings of 57.229 million acres.

 

Nine analysts surveyed estimate average 2006 winter wheat plantings at 41.405 million acres compared to the 40.433 million acres planted in 2005.

 

Of 11 analysts surveyed, the average estimate for other spring wheat acres is 14.113 million acres compared to 14.036 acres in 2005.

 

Analysts estimate wheat quarterly stocks at 973 million bushels as of Mar. 1, 2006 compared to 984 million as of Mar. 1, 2005.

 

Light commodity fund buying provided support to CBOT futures but with the reports due out tomorrow, position squaring remained the focus. People are waiting on the numbers to provide direction, a floor analyst said. Until the reports are out, there was no reason to buy or sell, the analyst added.

 

Commodity fund buying was estimated at 2,000 contracts.

 

Late in the session wheat backed off its gains as the lack of additional buying interest led to light selling before late strength in corn and soybean futures helped wheat recover to end near the upper end of its trading range, the analyst noted.

 

There was little other fresh news to trade off of, a floor trader said. The USDA reported weekly export sales for the week ended Mar. 23 at 512,600 metric tonnes, with 4,000 tonnes of the total sold for delivery in 2006-07.

 

Pre-report estimates called for sales between 250,000 and 550,000 tonnes.

 

Iraq was the major buyer on the week, purchasing 250,000 tonnes of hard red winter wheat. Sales of soft red wheat totaled 23,900 tonnes

 

CBOT May wheat settled 2 3/4 cents to US$3.44 1/2 per bushel, and July also gained 2 3/4 cents to US$3.57 1/4.

 

In CBOT trades, Rand bought 500 May and 200 July, ADM bought 200 July, Calyon bought 300 May, Fimat bought 200 July, Man Financial bought 200 July, JP Morgan bought 200 May, O'Connor bought 100 May, and Prudential Financial bought 200 July and 100 May.

 

JP Morgan sold 300 May and 200 July, Fimat sold 200 May, Citigroup sold 100 May and Man Financial sold 200 May.

 

 

Kansas City Board of Trade

 

KCBT wheat futures ended higher as short covering was the focus ahead of the reports, sources said. The market has taken out a lot of premium recently and it put a little back in today. In addition, if tomorrow's weekend forecast dries up, more premium will be put back in, a floor trader said.

 

In KCBT trades, ADM Investor Services bought 100 May, 200 July and 100 December, ABN Amro bought 100 July, Fimat bought 250 May and 150 July, Country Hedging bought 100 July and 100 December, Prudential Financial bought 100 May and 100 July, and the Refco division of Man Financial bought 200 July.

 

ABN Amro sold 400 July and 100 May, ADM Investor Services sold 100 May, 100 July and 100 December, Man Financial sold 200 May, Country Hedging sold 100 May and 200 July, the Refco division of Man Financial sold 200 July and Prudential Financial sold 150 May and 150 July.

 

KCBT May ended 4 1/4 cents higher at US$4.10 3/4 per bushel, and July settled up 4 cents at US$4.15 3/4.

 

 

Minneapolis Grain Exchange

 

Spring wheat settled "a little higher but there was not much of a feature," a floor trader said.

 

Volume was light as the market is waiting on the reports, he added.

 

MGE May wheat ended 2 1/2 cents higher at US$3.98 1/4, and July also gained 2 1/2 cents to US$4.03 1/4.

 

On Friday, the USDA is scheduled to release the Prospective Plantings and Quarterly Stocks reports at 7:30 a.m. CST. Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders report as of Mar. 28.