April 30, 2007

 

US Wheat Outlook on Monday: Down 9-12 cents on e-CBOT, lack of fresh inputs

 

 

U.S. wheat futures are predicted to begin Monday's day session activity 9 to 12 cents lower, following the weakness in overnight trading as well as the lack of fresh fundamental inputs, a commission house analyst said.

 

In overnight electronic trading, CBOT July wheat declined 10 1/2 cents to US$5.02 per bushel, while July KCBT hard red wheat fell 8 3/4 cents to US$4.93.

 

Wheat is expected weaker as the lack of fresh fundamental news and the lower prices in overnight trading should pressure prices, a commission house analyst said.

 

Technically, the market remains weak, and wheat could also see some month-end profit taking after the sharp gains seen earlier this month, the analyst said.

 

Forecasts for better weather in the U.S., as well as other wheat producing countries, could also weigh on the market, a floor trader said. It rained over the weekend in parts of Australia and there is some additional scattered rain in the forecasts. Parts of Europe that are dry could also see shower activity this week. News that India would import 1 million metric tonnes of wheat was expected, the trader added.

 

In the U.S. Midwest soft red winter wheat belt, there is a chance for a few light showers Tuesday with dry weather expected Wednesday, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal Tuesday and Wednesday.

 

In the U.S. hard red winter wheat belt, there is a chance for widely scattered thundershowers Tuesday and Wednesday with temperatures forecast near-to-above normal Tuesday and Wednesday.

 

On daily open auction technical charts, CBOT July wheat settled lower on profit taking though the bulls still have the near-term technical advantage, a technical analyst said. The bulls' next upside price objective is closing prices above solid resistance at the contract high of US$5.30 per bushel, the analyst said. First support is seen at US$5.19 and than at US$5.25. First resistance is pegged at US$5.06 1/2, Friday's low and then at US$5.00.

 

First resistance is seen at US$5.25 and then at the contract high of US$5.30. First support is seen at US$5.17 1/2, US$5.16 and then at US$5.08.

 

July KCBT closed lower but nearer the session high Friday. First resistance is seen at Friday's high of US$5.03 and then at US$5.05. First support is seen at US$5.00 and then at US$4.97.

 

Deliveries posted against the May future were 3,006 contracts Monday. Large issuers included the customer account of the Astro division of UBS, which issued 2,286 contracts.

 

Large stoppers included the customer account of Man Professional Clearing which stopped 1,085 contracts and the customer account of Rosenthal Collins which stopped 402 contracts. The last trade assigned was April 27.

 

Large speculative traders increased their long CBOT wheat futures and options on futures positions by 4,077 contracts and trimmed their short positions by 2,010 contracts and are now net short 6,619 contracts as of April 24, the CFTC said.

 

Large commercial traders reduced their long positions by 1,570 futures and options on futures and increased their short positions by 1,320 contracts and are now net short 154,244 contracts, the CFTC said.

 

At the KCBT, large commercial traders reduced their long futures and options on futures by 3,728 contracts and their short positions by 918 contracts and are now net short 39,311 futures and options on futures contracts. Large speculative traders cut their short positions by 2,955 contracts and trimmed their long positions by 376 contracts and are now net long 14,212 contracts, the CFTC said.

 

In other wheat news, India will import 1 million metric tonnes of wheat by July, the country's junior minister for food said Monday. Under the recently announced call option strategy for procuring wheat, the country announced it received two price quotes, a senior Food Corporation of India official said Monday.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspection report at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT (2000 GMT).