May 4, 2007

 

US Wheat Outlook on Friday: 1-2 cents lower; lacking fresh inputs

 

 

U.S. wheat futures are predicted to start trading 1-to-2 cents lower Friday as the lack of fresh inputs is expected to weigh on prices, a floor analyst said.

 

In overnight electronic trading, CBOT July wheat declined 1 1/2 cents to US$4.93 per bushel, while July KCBT hard red wheat fell 2 1/2 cents to US$4.80 1/2.

 

The lack of fresh news should keep wheat futures on the defensive with the market taking its direction from the other grains, the floor analyst said.

 

The Kansas Wheat tour results released Thursday afternoon indicated a better crop than earlier expected but the market anticipated this in Thursday's trade, a floor trader said.

 

Tour participants estimated hard red winter wheat production in Kansas at 392.7 million bushels with a yield of 41.0 bushels per acre. This compares to actual 2006 production of 291.2 million bushels and a yield of 32 bushels per acre.

 

Recent rains in parts of Europe's wheat growing regions have reduced some dryness concerns, and wheat could see some consolidation ahead of the weekend, the floor trader said.

 

In the U.S. Midwest soft red winter wheat belt, mainly dry weather is expected Monday and Tuesday, DTN Meteorologix Weather said. Temperatures are expected to average above normal Monday and near-to-above normal Tuesday.

 

In the U.S. hard red winter wheat belt there is a chance for scattered showers and thundershowers Monday and Tuesday for mainly the southern and eastern areas, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal west and near-to-above normal east.

 

On daily open auction technical charts, CBOT July wheat settled near mid-range Thursday and the bulls' next upside price objective is closing prices above solid resistance at US$5.08 per bushel, a technical analyst said. First resistance is seen at US$5.00 and than at US$5.07. First support is pegged at US$4.90, and then at US$4.84.

 

July KCBT also closed near mid-range in quiet trading. First resistance is seen at US$4.88 1/2, Thursday's high and then at US$4.91. First support is seen at US$4.79 and then at US$4.76 1/2.

 

Deliveries posted against the May future were 948 contracts. Large issuers included the customer account of SMW Trading, which issued 246 contracts and the customer account of Man Professional Clearing, which issued 241 contracts. Large stoppers included the house account of Term Commodities which stopped 176 contracts and the customer account of the Astro division of UBS Securities which stopped 291 contracts. The last trade date assigned was May 3.

 

In other wheat news, India's overall wheat supply situation in the 2007-08 marketing year appears better than last year on higher domestic production and a larger wheat carryover, according to a report posted by the U.S. Department of Agriculture attach¨¦ posted Thursday on the Foreign Agricultural Services Web site.