April 28, 2007

 

US Wheat Review on Friday: Chicago SRW leads prices lower

 

 

U.S. wheat futures finished the week on a down note Friday, pressured by forecasts for beneficial rainfall in dry wheat-growing regions of Australia and Europe.

 

July Chicago soft red winter wheat futures closed down 8 1/2 cents at US$5.12 1/2 a bushel.

 

"It's all about the weather," said veteran grain market analyst Victor Lespinasse from the floor of the Chicago Board of Trade. He said the rain forecast for some of the Australian and European wheat regions prompted the downside price pressure, which also included fresh fund selling in Chicago wheat.

 

After a run to a fresh contract high of US$5.30 a bushel on Thursday, July SRW wheat has backed off sharply, which is a clue the bulls have become exhausted after the recent strong surge higher from the early-April low of US$4.26 a bushel. Profit-taking pressure from the recent gains was also seen Friday.

 

Most of the April gains in the wheat futures market are attributed to the Easter weekend freeze in the midsection of the U.S., which damaged both the hard red winter and soft red winter wheat crops.

 

Techncially, first support for July Chicago wheat is located at Friday's low of US$5.06 1/2 and then at US$5.00. First resistance is seen at Friday's high of US$5.19 and then at US$5.25.

 

 

KANSAS CITY BOARD OF TRADE

 

July Kansas City hard red winter wheat futures closed down 2 1/4 cents at US$5.01 3/4 a bushel.

 

There are ideas that at least some freeze damage which occurred to the wheat crop in the Plains during the Easter freeze can be repaired in the coming weeks, and that has limited the upside in hard red winter.

 

Support is seen at Friday's low of US$4.97 and then at US$5.95. Resistance is seen at Friday's high of US$5.03 and then at US$5.05.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

July Minneapolis hard red spring wheat futures closed down 1 1/2 cents at US$5.35 3/4 cents.