May 9, 2006

 

US Wheat Review on Monday: Up on india wheat tender reports, specs

 

 

U.S. wheat futures ended firm Monday on reports that India's State Trading Corp. tendered for 3 million metric tonnes of wheat for July-October 2006 delivery and speculative buying, brokers said.

 

The gains occurred despite weak U.S. row crop, energy and precious metal futures and questions about the size of the 2006 U.S. hard red winter wheat crop following weekend rains in Kansas, they noted.

 

Kansas is the top U.S. winter wheat-producing state. Its crop is being closely watched this year as drought has slashed crop-production estimates for other key hard red winter wheat producers Texas and Oklahoma.

 

"We believe that it (eventual 2006 U.S. HRW wheat production) will be just above or below 750 million bushels," a CBOT wheat trader said Monday.

 

"At any rate, the market is a rationing market at 750 million," he added. "Potential (import) bids by Iraq and India are giving it a sense of stability. And we don't need any big ticket buyers at this level."

 

CBOT July wheat ended up 3 1/4 cents Monday at US$3.75 1/2 per bushel. CBOT May wheat closed up 2 1/4 cents at US$3.63 1/2.

 

Speculative funds bought 2,000 CBOT wheat contracts by 1:30 p.m. EDT, brokers said. Rand Financial bought 500 July; JP Morgan bought 400 July; and Citigroup, ABN Amro and Fimat each bought 300 July, brokers said.

 

Midday spot U.S. HRW Gulf barge bids were unchanged Monday while spot SRW bids fell 3 cents, cash sources said.

 

There were 101 deliveries posted Monday against CBOT May wheat futures with a customer of USA Blue stopping 75 lots. The last date available was May 3.

 

Wheat registrations late Friday at the CBOT totaled 1,660 lots.

 

There were 136 redeliveries of Kansas City Board of Trade wheat posted Monday and no deliveries of Minneapolis Grain Exchange wheat.

 

The U.S. Department of Agriculture reported Monday that weekly U.S. wheat export inspections totaled 11.35 million bushels, below traders' expectations and last week's 24.331 million bushels.

 

In other global wheat export news, Jordan said Saturday it was tendering to buy 120,000 metric tonnes of U.S. wheat; and Syria said Sunday it was tendering to sell 50,000 metric tonnes of Syrian wheat.

 

Iraq has finalized a contract to buy 350,000 metric tonnes of wheat from Australian suppliers outside the wheat monopoly AWB Ltd. (AWB.AU), the board's head, Khalil Assi, told Dow Jones Newswires on Monday.

 

Moreover, Iraq was expected to tender for more wheat this week, Australian sources said.

 

 

Kansas City Board of Trade

 

KCBT July hard red winter wheat settled up 6 cents at US$3.62 per bushel while old-crop May closed up 8 3/4 cents at US$4.57 3/4.

 

Prudential Financial was an early buyer of 1,000 July wheat while Man Financial bought 200 September and sold 100 July, they noted. Fimat Futures sold a net 250 KCBT July wheat while UBS sold 500 December, brokers added.

 

Spot cash 11% through 14% U.S. hard red wheat basis bids were unchanged Monday, according to the KCBT.

 

 

Minneapolis Grain Exchange

 

MGE July wheat settled up 4 cents at US$4.37 1/2 while May wheat ended up 2 cents at US$4.30 per bushel.

 

Cash U.S. spring wheat basis bids were steady to up 5 cents Monday, cash sources said. Minneapolis wheat receipts Monday totaled 176 railcars versus last year's 54 railcars. There were 90 durum receipts versus last year's zero cars.