May 7, 2008

 

US Wheat Outlook on Wednesday: Seen steady-up, lacking fundamental news

 

 

U.S. wheat futures are expected to start Wednesday's day session steady to slightly higher, following overnight gains.

 

The markets' movements are seen as limited on a dearth of fundamental news, a CBOT floor trader said.

 

At the Chicago Board of Trade, prices were seen as steady, while prices at the Kansas City Board of Trade and the Minneapolis Grain Exchange were called slightly higher.

 

In overnight electronic trading, CBOT July wheat closed 1/2 cent higher at US$8.18 1/2.

 

A Statistics Canada grain stocks report released Wednesday morning said the country's total wheat stock fell 32.2% to 10.825 million tonnes.

 

"There's no real surprises there," the trader said.

 

On Tuesday, the 2008 Kansas Hard Red Winter Wheat Tour calculated an average yield of 45.4 bushels an acre, based on 190 field surveys. That is up from an average of 40 bushels on day one of the 2007 tour, which consisted of 209 samplings. The 2007 crop was severely impacted by a damaging freeze and too much rain at harvest.

 

Growing conditions for the Kansas hard red winter wheat crop were variable, with much better moisture in eastern and east-central parts of the state but drying out significantly in central and western areas, where timely rain is needed, crop scouts and agriculture experts said Tuesday.

 

Moisture conditions are favorable across the eastern Plains areas with improving moisture conditions across the west, a DTN Meteorologix forecast said. Crop development is behind normal in all areas. Dry conditions continue through the southwest Plains where dryland fields continue to suffer, the private weather firm said.

 

For spring wheat planting, Meteorologix saw improving soil conditions for wheat through the northern Plains. Cold weather may force some replanting, the firm said.

 

Overall, the bears still have the near-term technical advantage at the CBOT, a technical analyst said. First resistance is seen at Tuesday's high of US$8.36 and then at US$8.43. First support lies at Tuesday's low of US$7.99 1/2 and then at US$7.91.

 

At the CBOT, deliveries against the May contract totaled 99 contracts. Man Professional Clearing issued 52 contracts and stopped 51.

 

In other news, Les Wozniczka, chief executive of Australia's Futuris Corp. (FCL.AU) said his company plans to take a much more active role in Australia's wheat market after bulk wheat export arrangements are liberalized through multiple accredited exporters from July 1.

 

The U.S. Department of Agriculture announced Wednesday private export sales of 300,000 metric tonnes of hard red winter wheat for delivery to Iraq in the 2008-09 marketing year. The wheat marketing year begins June 1.