April 3, 2006

 

US Wheat Outlook on Monday: Down 1-3 cents following e-CBOT trade

 

 

U.S. wheat futures were called to open down 1-3 cents per bushel Monday following weak overnight trade in a setback from Friday's rally on a lower-than-expected U.S. Department of Agriculture forecast for 2006 U.S. spring wheat plantings, brokers said.

 

In the overnight e-CBOT session, most-active May wheat at the Chicago Board of Trade closed down 1 3/4 cents at $3.46 per bushel.

 

Prices of CBOT May wheat Friday closed higher and at the weekly high close, which gives the bulls some fresh near-term technical momentum heading into the new trading week, a technical source said.

 

However, technical damage has occurred recently to still suggest that a market top is in place, he noted. A close in CBOT May wheat below the March low of $3.38 1/2 would provide the bears with fresh downside technical power.

 

It will take a close in CBOT May wheat back above resistance at $3.65 to provide the bulls with better upside technical momentum, he added. First resistance was seen at $3.50 1/2--Friday's high-and then at $3.55. First support was seen at $3.45 1/2--Friday's low--and then at $3.40.

 

The CFTC reported Friday that speculators in CBOT wheat futures for the week ended March 28 increased their short holdings by 436 lots to hold 69,743 short positions and increased their long holdings by 487 lots to hold 58,054 long positions.

 

For CBOT wheat futures and options combined, speculators were short 60,378 lots, up 1,234 contracts from the week before, and long 60,571 contracts, down 673 lots from the previous week.

 

For KCBT wheat futures only, speculators for the week ended March 28 slightly cut their heavy net long stance. They decreased their long holdings by 3,256 lots to hold 39,844 long positions and increased their short holdings by 1,006 lots to hold 7,024 short positions.

 

For KCBT wheat futures and options combined, speculators were long 39,142 lots, down 3,577 contracts, and short 5,488 contracts, up 589 lots from the previous week.

 

For MGE spring wheat futures only, speculators for the week ended March 28 also cut their net long positions, paring long holdings by 1,011 lots to 10,538 lots and increasing short holdings by 24 lots to 301 lots.

 

For MGE spring wheat futures and options combined, speculators decreased their net long positions, cutting long holdings by 1,017 lots to 10,264 contracts and increasing short holdings by 29 lots to 307 contracts.

 

Cash U.S. hard red winter wheat basis bids were steady at one Nebraska location, however most Kansas bids weren't available early Monday, cash sources said.

 

U.S. soft red winter wheat cash basis bids were steady in Evansville, Ind. and largely unavailable elsewhere in the U.S. Midwest early Monday; while U.S. spring wheat basis bids were steady at Duluth, Minn. but largely not available elsewhere, grain merchandisers said.

 

Light rains of up to 1.5 inch fell over central Kansas' hard red winter wheat belt this weekend, while rains of 0.25 to 0.75 inch fell over parts of Oklahoma, according to Meteorlogix weather service's Joel Burgio.

 

Forecasts for the U.S. HRW belt called for mostly dry weather through Tuesday, he added.

 

U.S. wheat export sales were quiet.