June 21, 2006

 

US Wheat Outlook on Wednesday: Up 1-2 cents on technicals bounce

 

 

U.S. wheat futures were called to open up 1-2 cents per bushel Wednesday on follow-through technical buying on a larger-than-expected decline in the U.S. spring wheat crop condition rating, brokers said.

 

The U.S. Department of Agriculture reported Monday a 7 percentage point drop in the U.S. spring wheat crop's good-to-excellent condition rating to 60%.

 

Twenty-one percent of the U.S. spring wheat crop was headed, an indication of how this time is critical for yield development.

 

This week's rain-led harvest delays in Kansas, the top U.S. winter wheat producer, have also underpinned KCBT wheat this week.

 

The U.S. winter wheat crop was 38% harvested as of Sunday, more than double last year's tally and 17 percentage points above the five-year average, the USDA said Monday.

 

In the overnight e-CBOT session, most-active September wheat closed up 2 cents at US$3.86 3/4 per bushel.

 

Chart support for CBOT September wheat futures was seen at the 200-day moving average of US$3.74 while resistance was put at the 10-day moving average of US$3.86.

 

Kansas City Board of Trade September wheat ended overnight up 2 1/2 cents at US$4.85 per bushel.

 

Cash U.S. hard red winter wheat basis bids were steady to firm Wednesday, with a 4-cent gain in Portland, Ore.; soft red winter wheat basis bids were mixed, with an 4-cent gain in the Kansas City truck bid; and spring wheat basis bids were mixed, with a 10-cent gain in the Minneapolis rail bid, grain merchandisers said.

 

In U.S. wheat export news, the Korea Flour Milling Co. Ltd. bought 17,500 metric tonnes of U.S. No. 1 wheat including 7,000 tonnes of western white, 6,000 tonnes of hard red winter and 4,500 tonnes of dark northern spring; and two South Korean flour mills - Daehan and Daesun - bought 9,500 metric tonnes of U.S. No. 1 wheat, including 3,000 tonnes of soft white, 1,500 tonnes of hard red winter and 5,000 tonnes of dark northern spring.

 

In global news, the French state grains board National Service Interprofessional des Grandes Culture, or ONIGC, forecast Wednesday 2006-07 soft wheat production of 36.9 million metric tonnes, up 6% from the previous year.

 

It also increased its 2006-07 forecast for hard wheat production by 10% to 2.2 million tonnes.

 

ONIGC also on Wednesday increased its forecast for 2006-07 soft wheat ending stocks to 3.82 million metric tonnes, from 3.758 tonnes estimated in May; and boosted its forecast for 2006-07 hard wheat ending stocks to 0.158 million tonnes from 0.147 million tonnes in May.