May 2, 2007

US Wheat Outlook on Wednesday: Down 2-4 cents, weak overnight, lacks fresh news

U.S. wheat futures are expected to begin trading 2-to-4 cents lower Wednesday as lower prices in overnight trading and a lack of fresh inputs are expected to weigh on prices, a commission house analyst said.

In overnight electronic trading, CBOT July wheat fell 2 cents to US$4.99 per bushel, while July KCBT hard red wheat declined 2 1/2 cents to US$4.84 1/2.

The market is lacking fresh inputs and should open weaker, a floor analyst said. The Kansas wheat tour is reporting widely variable yields but the trade expected that given earlier field reports. Some areas have been hit hard while other areas look good, so there is no clear report on the overall impact on the hard red winter wheat crop, the analyst added.

Parts of Europe's wheat growing areas received some rain which might pressure prices, but wheat will be watching corn futures and if corn rallies wheat could see some spillover, a commercial analyst said.

In the U.S. Midwest soft red winter wheat belt, there is a chance for showers and thundershowers Thursday mostly south of a line between St. Louis and Dayton, DTN Meteorologix Weather said. Light showers are possible Friday in some western and northern sections. Temperatures are expected to average near-to-above normal during this period.

In the U.S. hard red winter wheat belt there is a chance for scattered thundershowers early Thursday in parts of the Texas Panhandle, parts of Oklahoma and southeast Kansas, with dry weather or only a few light thundershowers in the north Friday. Temperatures are expected to average near-to-above normal Thursday and above normal Friday, Meteorologix Weather said.

On daily open auction technical charts, CBOT July wheat settled nearer the session high on bargain-hunting after recent losses and follow-through from corn, a technical analyst said. The bulls' next upside objective is closing prices above solid resistance at US$5.18 per bushel, with the bears' next downside objective closing prices below solid support at US$4.90, the analyst said. First resistance is seen at US$5.02 3/4 and than at US$5.07. First support is pegged at US$4.95, and then at US$4.90.

July KCBT closed higher after hitting a fresh three-week low early in the session. The bulls' next upside price objective is closing prices above chart resistance at US$5.00 per bushel. First resistance is seen at US$4.91 and then at US$4.95. First support is seen at US$4.83 and then at US$4.80.

Deliveries posted against the May future were 1,859 contracts. Large issuers included the customer account of Man Professional Clearing, which issued 924 contracts and the customer account of SMW Trading, which issued 256 contracts. Large stoppers included the customer account of Man Professional Clearing which stopped 728 contracts and the customer account of the Astro division of UBS Securities which stopped 365 contracts. The last trade assigned was May 1.