June 7, 2006

 

US Wheat Outlook on Wednesday: Mixed; seasonals, harvest vs pre-USDA

 

 

U.S. wheat futures were called to open mixed Wednesday as seasonal weakness and U.S. harvest pressure may be offset by positioning ahead of Friday's U.S. Department of Agriculture wheat production and ending stocks data, brokers said.

 

The USDA has said that it will resurvey farmers in key wheat growing state Kansas, Oklahoma, and Texas as to wheat acreage for this report, and many traders say that fresh survey could result in bullish U.S. wheat production data.

 

In the overnight e-CBOT session, most-active July wheat closed down 1/2 cent at US$3.84 1/2 per bushel.

 

"It still appears a market top is in place, especially with Tuesday's price action," a technical source said. "The next downside price objective for the bears is solid technical support at US$3.75. It will take a close back above resistance at US$4.00 to provide the bulls with any fresh upside technical momentum."

 

First resistance for CBOT July wheat was seen at US$3.90 and then at US$3.95--Tuesday's high. First support lies at US$3.83--Tuesday's low--and then at US$3.80.

 

Kansas City Board of Trade July wheat ended overnight up 2 1/4 cents at US$4.80 1/2 per bushel.

 

"The bears have some fresh downside technical momentum, the source said. "Their next downside objective is closing prices below support at the April high of US$4.71 1/2. It will take a close back above major psychological resistance at US$5.00 a bushel to revive the bulls.

 

First resistance for KCBT July wheat was seen at US$4.86 and then at US$4.90. First support is seen at US$4.78--Tuesday's low--and then at US$4.75.

 

Cash U.S. hard red winter wheat basis bids were mostly steady Wednesday, with a 2-cent loss at Port of Catoosa, Okla.; soft red winter wheat basis bids were mostly weak, with an 8-cent loss in Evansville, Ind.; and spring wheat basis bids were unchanged, grain merchandisers said.

 

In wheat export news, Jordan is tendering to buy 50,000 tonnes of wheat while Syria said was selling 50,000 tonnes of wheat, including 25,000 tonnes of durum and 25,000 tonnes of soft milling wheat.

 

U.S. traders continue to eye planting and weather reports from Australia and Argentina amid lingering dry weather in parts of these two countries' wheat belts.