June 16, 2006

 

US Wheat Outlook on Friday: Up 2-4 cents on technicals, CBOT corn calls

 

 

U.S. wheat futures were called to open up 2-4 cents per bushel Friday on technical buying after firm overnight trade and following calls for a firm open in Chicago Board of Trade corn and soybean futures, brokers said.

 

"Each day is a clean slate," said Vic Lespinasse, a CBOT-based analyst for AG Edwards & Sons, of the calls for CBOT corn and soybeans.

 

"You come in and look at the fresh weather forecasts," he noted. "We live and die on the weather, and it will be that way for quite some time."

 

One Kansas City Board of Trade source noted that wheat traders were also watching weather news for the U.S. spring wheat crop and key Southern Hemisphere wheat crops in Australia and Argentina.

 

"The feel from the trade floor late in the day is that the recent market slide has gone far enough and further breaks will be limited," he said. "Until more is know about Southern Hemisphere crops and spring wheat crops, weather premium must be maintained at current levels. Short-term, the market remains technically weak."

 

In the overnight e-CBOT session, most-active September wheat closed up 3 1/2 cents at US$3.80.

 

Chart support for CBOT September wheat futures was seen at Wednesday's six-week low of US$3.75 while resistance was put at the 100-day moving average of US$3.90.

 

Kansas City Board of Trade September wheat ended overnight up 2 ¼ cents at US$4.75 per bushel. Support was seen at Wednesday's five-week low of US$4.67 while resistance was put at the 50-day moving average of US$4.75 1/2.

 

Cash U.S. hard red winter wheat basis bids were xxx; soft red winter wheat basis bids were xxx; and spring wheat basis bids were xxx, grain merchandisers said. In global wheat news, the European Union's grain management committee boosted the quantity of two tenders to sell intervention wheat on the domestic market, according to the Home Grown Cereals Authority, or HGCA, Friday.

 

The tender to sell German intervention wheat was raised by 50,000 metric tonnes to 150,000 tonnes and the one for Poland was raised by 100,000 tonnes to 250,000 tonnes.

 

The HGCA also reported that the U.K. exported 224,175 metric tonnes of wheat in April, up 35% from the previous month. All of the April wheat exports were to countries within the European Union.