June 20, 2006

 

US Wheat Outlook on Tuesday: Up 2-4 cents on techs, spring wheat rating

 

 

U.S. wheat futures were called to open up 2-4 cents per bushel Tuesday on follow-through technical buying and a larger-than-expected decline in the U.S. spring wheat crop condition rating, brokers said.

 

Moreover, the Australian Bureau of Agricultural & Resource Economics lowered its forecast for Australia's new-crop wheat production to 22.8 million metric tonnes. The number, if achieved, would be down 9.2% from actual output of 25.1 million tonnes for the last crop year ended March 31, 2006.

 

Australia is a key global wheat exporter.

 

Back in the U.S., the U.S. Department of Agriculture reported Monday that the U.S. spring wheat crop's condition as of Sunday was down seven points, to 60% good-to-excellent condition.

 

Twenty-one percent of the U.S. spring wheat crop was headed, according to the report, up 15 percentage points from last week.

 

Meanwhile, the U.S. winter wheat crop was 38% harvested, more than double last year's tally and 17 percentage points above the five-year average.

 

The 18-state winter wheat average remains unchanged at 29% good-to-excellent condition.

 

Kansas, the top U.S. winter wheat producing state, had a major impact on the averages, traders said. The harvest in Kansas was 53% complete, up from 15% harvested the previous week.

 

In the overnight e-CBOT session, most-active September wheat closed up 3 1/2 cents at US$3.79 3/4 per bushel.

 

Chart support for CBOT September wheat futures was seen at Friday's low of US$3.74 while resistance was put at the 10-day moving average of US$3.85 1/2.

 

Kansas City Board of Trade September wheat ended overnight up 2 3/4 cents at US$4.72 3/4 per bushel.

 

Cash U.S. hard red winter wheat basis bids were steady to weak Tuesday; soft red winter wheat basis bids were mixed, with an 8-cent gain in the Kansas City truck bid; and spring wheat basis bids were steady to firm, grain merchandisers said.

 

In U.S. wheat export news, the Korea Flour Milling Co. Ltd. sought 17,500 metric tonnes of U.S. No. 1 wheat in a tender to be concluded on Wednesday; and two South Korean flour mills - Daehan and Daesun - sought 9,500 metric tonnes of U.S. No.1 wheat in a tender to be concluded on Wednesday.

 

Japan's Ministry of Agriculture, Forestry and Fisheries sought 100,000 metric tonnes of wheat, including 60,000 tonnes Of U.S. wheat, for Aug. 1-31 shipment.