April 24, 2007

 

US Wheat Outlook on Tuesday: Down 8-10 cents on crop progress report

 

 

U.S. wheat futures are predicted to begin Tuesday's day session trade 8- to 10- cents lower following losses in overnight trading and Monday's crop conditions survey which reported the winter wheat crop did not decline as much as anticipated, a floor analyst said.

 

In overnight electronic trading, CBOT July wheat declined 10 cents to US$4.95 1/2 per bushel, while July KCBT hard red wheat fell 9 cents to US$5.01 1/2.

 

The crop conditions report showed a decline in conditions but not as severe as what the trade had anticipated and the market sold off last night with the weakness expected to continue on the opening, the floor analyst said.

 

The U.S. Department of Agriculture reported that 54% of the U.S. winter wheat crop was in good-to-excellent condition, down one percentage point from the previous week but above expectations calling for a 3% to 6% decline in conditions.

 

Sixteen percent of the winter wheat crop was reported headed compared to 24% last year and the five-year average of 15%.

 

The market will be lower on the conditions report and the weather forecasts for Australia and parts of eastern Europe wheat growing areas which are calling for the potential for moisture which could also add light pressure, a floor trader said.

 

In the U.S. Midwest soft red winter wheat belt, widespread rains and possible thunderstorms are possible Wednesday with rainfall averaging 0.50-2.00 inches during this period, DTN Meteorologix Weather said. Temperatures are expected to average near- to below-normal Wednesday.

 

In the U.S. hard red winter wheat belt there is a chance for scattered showers and thunderstorms with amounts 0.30-1.50 inches and locally heavier Wednesday, lingering into Thursday, Meteorologix Weather said. Temperatures are expected to average near-to-below normal in the period.

 

On daily open auction technical charts, CBOT July wheat settled lower on profit-taking after the recent sharp advances, a technical analyst said. Bulls still have the technical advantage but above US$5.00 advances have been turned back and the market will continue to react to assessments of the recent freeze damage, the analyst said

 

First resistance is seen at Monday's high of US$5.13 and then at US$5.18. First support is pegged at US$5.03 1/2 and then at US$5.00.

 

July KCBT closed nearer the session low Monday on profit-taking pressure, the analyst said.

 

First resistance is seen at Monday's high of US$5.07 and then at US$5.10. First support is seen at US$4.99 and then at US$4.95.

 

In other wheat news, Statistics Canada estimates 2007 All-wheat acreage at 23.76 million acres, down from the 26.386 million planted in 2006.